Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — SHIPPING

Shipyards (Orders)

Mr. Hector Hughes: asked the Minister of Transport if he is aware of the succcess of German, Dutch, Scandinavian and other foreign shipyards in their competition for relevant orders with British, and particularly Scottish, shipyards, and that this is causing increasing unemployment in certain British shipyards, particularly in Aberdeen; and if he will state the results of his investigation into the effects of these conditions on the increased unemployment in the British shipyards affected and the steps he is now taking, giving details, to attract orders to, and reduce unemployment in, those shipyards.

The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett): We have no information about Aberdeen shipyards losing orders to foreign yards. But Scotland as a whole has been quite successful recently in capturing both British and foreign orders.

Mr. Hughes: Does not the Minister agree that it would be a great advantage to the British Navy if in future ships built for registration in Britain were registered separately from those registered abroad?

Vice-Admiral Hughes Hallett: That is rather a different question.

Mr. Milne: asked the Minister of Transport what assistance in securing orders he is prepared to give to the smaller British shipyards who have adapted themselves to the changing conditions of their industry.

Vice-Admiral Hughes Hallett: These yards should be in a better position to secure new orders than those which have not been modernised. It is not the policy of the Government in placing its own orders to give preference on other than competitive considerations, or to try to persuade other people to do so.

Mr. Milne: Does not the Minister realise that this reply will be a little disappointing to many smaller yards which have equipped themselves to meet modern conditions? Is he not aware that there are many restricted tenders which lay down that yards must have built certain types of ship before they can be considered? Will he look into the matter very closely, in view of the fact that we have such a shipyard in my constituency, which the Parliamentary Secretary has visited?

Vice-Admiral Hughes Hallett: We will certainly consider these points, but we should be very reluctant indeed to depart from the general principle of competitive tender. We shall have an opportunity of debating this in greater detail tomorrow.

Mr. Shinwell: As the Government hitherto have done nothing at all for the British shipbuilding industry, why cannot they provide the facilities for the home industry which they are providing for exports in shipbuilding? Why this desire to promote exports when it cannot be made effective unless at the same time we build up the home industry, otherwise everything becomes more expensive?

Vice-Admiral Hughes Hallett: With great respect to the right hon. Gentleman, this anticipates another Question on the Order Paper. In any case, I do not think that I could effectively deal with this matter, of which we are well aware, in Question and Answer. Perhaps this can be raised in the debate tomorrow. I have no doubt that it will be raised then.

Mr. P. Browne: Does not my hon. and gallant Friend think that the best service he can render to the small shipyards is to protect our own coastal shipping fleet?

Vice-Admiral Hughes Hallett: No. Sir. I do not think that that is so. I do not agree with that.

"Queen Mary" (Replacement)

Mr. Rankin: asked the Minister of Transport what provision he intends to include in the Estimates for 1962–63 for advances to Cunard White Star Limited, for the construction of a large vessel, as authorised by the North Atlantic Shipping Act, 1961.

Vice-Admiral Hughes Hallett: I have nothing to add to the reply my right hon. Friend gave to my hon. Friend the Member for Tynemouth (Dame Irene Ward) on 13th December.

Mr. Rankin: Has the Minister not yet realised that the idea of building a 75,000-ton replacement for the "Queen Mary" is now as dead as the dodo? Will he not reconsider the whole matter and give his mind instead to the building of two 40,000-ton replacements? Does he realise that such a plan would bring much greater support to shipbuilding than that which is now being entertained?

Vice-Admiral Hughes Hallett: That is a matter for the Cunard Company, in the first instance. It has informed us that it does not expect to be in a position to make further proposals until the second quarter of this year, when it has completed its reassessment of traffic prospects.

Mr. J. Howard: Does not my hon. and gallant Friend agree that the suggestion that we should have two 40,000-ton liners instead of a 70,000-ton liner is entirely irrelevant?

Vice-Admiral Hughes Hallett: I would rather not be drawn into this matter. It does not arise directly from the Question.

Mr. Rankin: Is the Minister aware that the question of its relevance is quite irrelevant to the point before us now? Is he telling us that Parliament has to await the pleasure of the Cunard Company while shipbuilding is going through a most difficult period?

Vice-Admiral Hughes Hallett: I do not know whether the hon. Member is suggesting that we should build a Government-owned ship to cross the North Atlantic. So far, that has not been suggested.

Oil Pollution

Mr. Awbery: asked the Minister of Transport if he is aware that oil pollution of the sea is worsening; and if he will take steps to bring to the attention of masters and crews of oil carrying and oil burning vessels the dangers of this defilement to beaches and birds and the methods they can adopt to prevent it.

Vice-Admiral Hughes Hallett: A comprehensive manual on this subject has been produced by the Ministry and we intend to pursue this matter vigorously at the forthcoming International Conference. However, my information is that pollution around the coasts of the United Kingdom has somewhat decreased during the past year.

Mr. Awbery: Is the Minister aware that this battle for the birds, the beaches and the seaside resorts has been going on for a considerable time and that it appears to me from what I see that little progress has been made? Will the Minister take unilateral action against our ships when waste oil is thrown overboard? Is he aware that I am glad to hear that he is placing this matter on the Agenda at the meeting to take place next month?

Vice-Admiral Hughes Hallett: I must point out that there are a number of prosecutions every year for this offence. There is the difficulty of enforcement outside the three-mile limit, and the chief object at the conference will be to get additional nations to adhere to the Convention and make it more effective.

Mr. Awbery: Cannot we show an example in this country?

Russian Trawlers (Flares)

Mr. Awbery: asked the Minister of Transport if he is aware that the orange red flares used by Russian trawlers to communicate with each other, and the red flare distress signals, are almost indistinguishable from a distance, and that this resemblance has been the cause of British lifeboats being called out on useless journeys; and if he will make representations with a view to effecting a change.

Vice-Admiral Hughes Hallett: I have seen reports that Russian trawlers use


orange red flares for communications purposes, but they have not been substantiated. The most recent case which was reported in the Press turned out to have been caused by a distress rocket from a British lobster vessel whose engine had temporarily broken down.

Mr. Awbery: Is the Minister aware that we do not appreciate the work of these lifeboatmen as much as we ought? Is he aware that although we are all glad of the good work they are doing, we do not want them to be called out unnecessarily? If by the use of flares which are so much alike at a distance there is a danger that these men might be called out unnecessarily, why not, by mutual arrangement with the countries concerned, change the colour of the signals? That would obviate the necessity of their being called out unnecessarily in future. Perhaps the Minister could arrange to have this matter placed on the agenda of the Conference which is taking place next month?

Vice-Admiral Hughes Hallett: I do not think we could do that, because the Conference is on the subject of oil pollution. We should, of course, make representations if we thought that other countries were infringing the accepted custom that red flares are a sign of danger for those at sea on their lawful occasions. I entirely associate myself with what the hon. Member has said about the good work of the lifeboat service, but I must point out that it is the practice of Her Majesty's Coastguard and the lifeboat service to interpret any unusual signals at sea as distress signals because they would rather go on a number of fruitless journeys than miss one genuine call.

Credit Facilities

Mr. Shinwell: asked the Minister of Transport what steps he took to obtain the views of shipowners and shipbuilders on the credit facilities for exports announced by the Government; and what was their response.

The Minister of Transport (Mr. Ernest Marples): Shipowners and shipbuilders have both made known to us their views on credit facilities. As my right hon. and learned Friend the Chancellor of the Exchequer has said, the new arrangements for export credit were

worked out in the City. Like him, we heartily welcome this initiative to help our exports.

Mr. Shinwell: Does the right hon. Gentleman mean that when these representations were made, either to himself or to his right hon. and learned Friend, on the subject of these export provisions nothing was said about the need for stimulating the home trade in shipbuilding? Was nothing said about that? Did they make no complaint at all?

Mr. Marples: I remind the right hon. Gentleman of what my right hon. and learned Friend said yesterday. I have no evidence that any British shipowner has refrained from ordering new ships because of inadequate credit facilities. If the right hon. Gentleman has some information, I should be grateful to receive it.

Dr. King: Is the Minister aware that some shipbuilders are in danger of losing some very valuable contracts with foreign countries for shipbuilding because of the limitation on the credit that he is prepared to offer them?

Mr. Marples: It rather depends on what the hon. Gentleman means by limitations on credit. The normal commercial credit is available to almost any exporter and is also available to shipowners, as well as to other engineering industries.

Mr. Shinwell: In view of the lamentable record of the right hon. Gentleman and his associates on the Treasury Bench in regard to the Cunard fiasco, is it not desirable that something should be done to stimulate British shipbuilding and provide credit facilities to shipowners and shipbuilders who cannot obtain it in the normal fashion? What does he intend to do about this?

Mr. Marples: My right hon. and learned Friend the Chancellor of the Exchequer announced a new scheme. Export Credits have extended the length of their credit insurance, and this is done by the Government. The main point is that the shipowners themselves have not asked for credit and I am certain that so far we have no evidence that any British shipowner has not placed an order because of lack of credit.

Oral Answers to Questions — RAILWAYS

Branch Lines (Closures)

Mr. Owen: asked the Minister of Transport whether he has now received reports from the Northumberland Transport Consultative Committee, concerning the closure of branch lines, the limitation of other branch lines, and the availability of alternative means of transport; and whether he will make a statement.

The Parliamentary Secretary to the Ministry of Transport (Mr. John Hay): The Transport Users Consultative Committee for the North Eastern Area send copies of its minutes to the Central Transport Consultative Committee and to the British Transport Commission. The Central Committee have not drawn the attention of my right hon. Friend to any reports of the North Eastern Area Committee since his reply to the hon. Member's Question on 20th December last.

Mr. Owen: Is the Parliamentary Secretary aware that the closure of branch lines continues and that it has a serious economic effect upon both rural and urban areas? Is not he prepared to give further consideration to the necessity to provide adequate transport facilities in Northumberland?

Mr. Hay: That goes far wide of the Question on the Order Paper. The hon. Member asked whether we had received reports from this Consultative Committee. The answer is, "Not since 20th December."

Mr. Hector Hughes: asked the Minister of Transport if he is aware that the closure of certain branch railway lines in the north of Scotland has militated against the bringing of trade, industry, employment and population to the north of Scotland; and if he will place in the Library the evidence which he received from the Central Transport Consultative Committee before deciding to order each of those closures.

Mr. Hay: The few closures of branch lines in the north of Scotland which have taken place in recent years were approved by the Transport Users Consultative Committee for Scotland, who made no recommendation to us. No doubt they took into account, as is their usual practice, the availability of alter

native services and any firm plans for industrial development.

Mr. Hughes: Does not the Minister realise that, by closing branch lines in the north of Scotland without due inquiry, he is making chaos of the policy of the Secretary of State for Scotland who is doing his best to bring trade, industry and commerce to the north of Scotland? Will the Minister of Transport agree to consult the Secretary of State for Scotland so that they can put their heads together to formulate some constructive and useful policy instead of having this destructive policy?

Mr. Hay: The Minister of Transport does not close branch lines. That is a matter for the British Transport Commission. Parliament has laid down a consultative committee procedure which serves to bring to the surface any views such as those mentioned by the hon. and learned Member. These are taken into account by my right hon. Friend when he is asked to approve or disprove the proposals of the Commission.

Mr. Mellish: May we have an assurance that where a branch line is closed on the recommendation of any body, and where it can be shown that there is a public need although an economic loss, the Government will if necessary subsidise the branch line in order that it may be retained?

Mr. Hay: I can give no assurance of that kind. Each case is looked at entirely on its merits. We do all we can to obtain the fullest possible information from all those who may be affected by the closure of a line or the withdrawing of a service.

Mr. Boyden: asked the Minister of Transport why he declined to meet the deputation from the Stainmore Line Protest Committee, who wished to see him regarding the reasons for his decision to approve the closing of the line, in view of the widely representative character of that committee and their experience of freight traffic on this and associated lines.

Mr. Hay: My right hon. Friend received the letter suggesting that he should meet the deputation more than a month after his decision was announced, and only ten days before the line was due to be closed. Both the area transport


users' consultative committees and the central committee had examined the proposal with the greatest care and had recommended closure. My right hon. Friend therefore considered that no useful purposes would be served by his receiving a deputation.

Mr. Boyden: That is what the Minister said on two previous occasions. Is the hon. Member aware that the original case for closing this line was based on a 25 per cent. error as to the freight which could be hauled over Stainmore? Is he aware that following this every consultative committee must have gone wrong because every decision was based on the original error?

Mr. Hay: All I can say is that the area transport users' consultative committees went into this matter with the greatest care. They held no fewer than six meetings. Objectors had ample opportunity to make representations during the two years which elapsed between the original announcement and the Minister's final decision. On week days in the winter on this line the average number of passengers per train was twenty and between forty and fifty railwaymen were on duty to run those trains.

Mr. Popplewell: Does not the Minister realise that transport users' consultative committees cannot make recommendations for a line to remain open and that the responsibility for keeping a line open rests on his shoulders, if he gives such a directive? In view of the social need for this line, will he not take a rather broader-minded view and give a directive that the line should be kept open in order to meet the needs of this very sparsely populated area?

Mr. Hay: It is not a case of taking a broad-minded or a narrow-minded view. Many of these branch lines all over the country are losing money simply because they are not patronised. The Ministry has a dual responsibility to the nation and to the House for the spending of the public money which is involved in this subsidy.

Mr. Rodgers: Does not my hon. Friend think that it is a little odd that when consultative committees recommend the closure of a line he hides behind this decision, but that when a consultative committee recommends that a line should

be kept open, as was the case in the Dunton Green-Westerham Line, he still closes it?

Mr. Hay: No. Sir. With respect to my hon. Friend, he is completely distorting the situation. There is no comparison between these two cases. I have already dealt very fully with this case, and my hon. Friend should remember the very detailed correspondence and the meetings which he and I had on the closure to which he referred.

Mr. Box: asked the Minister of Transport if he will give a general direction to the British Transport Commission to pay compensation to coal merchants who are dispossessed of facilities by the closure of railway stations and yards.

Mr. Marples: No, Sir. This is a matter between the Commission and the coal merchants.

Mr. Box: Is my right hon. Friend aware that reports have been appearing in responsible sections of the Press recently that some thousands of pounds have already been paid in the form of compensation in some parts of England? Can he give an estimate of what the total figure is likely to be, particularly in respect of Wales, where considerable rail closures are in contemplation?

Mr. Marples: I cannot do that without notice. Perhaps my hon. Friend will let me have these statements from some responsible parts of the Press.

Glasgow-Gourock Line (Electrification)

Dr. Dickson Mabon: asked the Minister of Transport how much money has been spent on preliminary work concerned with the proposed electrification of the Glasgow-Gourock railway, under the capital development scheme.

Mr. Marples: I am informed by the British Transport Commission that some £12,000 has been spent on preliminary survey work in connection with a proposed scheme to electrify the line from Glasgow to Gourock and Wemyss Bay.

Dr. Mabon: In view of the expenditure of this money, can we expect a favourable decision by the end of the year?

Mr. Marples: The survey has been carried out on the well-known Army maxim, "Time spent on reconnaissance is seldom wasted."

Losses

Mr. Nabarro: asked the Minister of Transport what estimate he has made of losses, after interest payments, by the railways in respect of the year to 5th April, 1962; and whether he will make a statement.

Mr. Marples: For 1961, their accounting year, British Railways' deficit is estimated to be about £151 million. This figure includes some £15 million for interest on borrowings by the British Transport Commission to meet the revenue deficit of British Railways. Estimates of the railways' deficit for the twelve months ending 5th April, 1962, are not available.

Mr. Nabarro: Is not that figure of £151 million approximately £11 million more than the estimated loss, and can my right hon. Friend tell the House whether we shall be given a statement shortly as to the profit-earning prospects of British Railways in the next few years, if at all, having regard to the huge investment of new moneys in the railway system as part of the modernisation plan?[HON. MEMBERS: "Why not."] Yes, I am all for it, but when are they going to start showing a return on it?

Mr. Marples: The present Chairman of the British Transport Commission has instituted a number of traffic studies and is going into them with great exactitude and is trying to be as precise as he can. We must wait until he has finished those studies.

Mr. H. Hynd: Does not this figure of the deficit which the hon. Gentleman has just mentioned show the damage done to the finances of the British Transport Commission when the road traffic was taken away from it?

Mr. Marples: I do not think so.

Wages

Mr. Nabarro: asked the Minister et Transport what further conversations he has now had with Dr. Beeching on railwaymen's wages with a view to avoiding strikes, following the rejection by rail

way unions of the 3 per cent. offer; and whether he will make a statement.

Mr. Marples: As my hon. Friend will be aware, my right hon. Friend the Prime Minister is meeting representatives of the three railway unions later today. He will understand, therefore, that I would prefer to make no comment at present on the question of the railwaymen's wage claim.

Mr. Nabarro: Can my right hon. Friend give the House an assurance that he has appropriately briefed the Prime Minister as to the feeling in his party and that if the concession in regard to wages were in excess of the 3 per cent. it would make a mockery of the "guiding light" in the incomes White Paper?

Mr. Marples: In view of the fact that the meeting is to take place in less than half-an-hour's time, I think it would be discourteous of me to say anything more.

Mr. Strauss: Can we assume from what has happened that the Minister's request to Dr. Beeching to skip the negotiations stage in the conciliation machinery and to go straight to arbitration without having any negotiations has now been withdrawn?

Mr. Marples: If the right hon. Gentleman will look at HANSARD for 7th February he will see that the Parliamentary Secretary answered that in a Written Answer to a Question which he put down.

Mr. Strauss: No answer at all.

Oral Answers to Questions — TRANSPORT

Road Vehicles (Exhaust Fumes)

Mr. Ellis Smith: asked the Minister of Transport if he will make a statement on his policy on the elimination of exhaust fumes from road vehicles; whether he proposes to take steps to ensure that new elbows shall be fitted on all diesel engines; and when he expects to make regulations for the complete elimination of exhaust fumes.

Mr. Lipton: asked the Minister of Transport what further action he is taking to end the growing nuisance of exhaust fumes from motor vehicles.

Mr. Hay: The regulations recently issued on the use of the excess fuel device should have a useful effect in reducing the emission of dark diesel smoke, especially on long hills. Following discussion with the National Society for Clean Air, we are considering how we can improve observance of the law against harmful fumes. If we succeed in developing a satisfactory method of roadside measurement, it would be possible to impose a specific limit on the density of smoke emitted. We are also keeping under review work both here and in the United States on methods of eliminating the harmful constituents of petrol exhaust fumes. I have no information about the device referred to by the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) but will be glad to look into it if he will let me have details.

Mr. Ellis Smith: Is the hon. Gentleman aware that all who are interested in this matter will very much appreciate that reply? Is he further aware that the device mentioned in the Question is the result of years of research carried out by Gardners of Manchester, one of the most efficient engine manufacturers in the world? Will he consult them in order to decide whether it should be made universal?

Mr. Hay: We recently consulted Messrs. Gardners and I am advised that they said they knew nothing about this device. That was why I particularly asked in my Answer whether the hon. Gentleman would let me have full details, because I should very much like to hear them.

Mr. Lipton: Is the Minister aware that unless something is done about this problem, pedestrians and motorists who are caught up in traffic jams in London and other large towns will have to wear gas masks? Is he aware that something ought to be done quickly to end what is an intolerable, stinking nuisance?

Mr. Hay: That is why we are getting rid of the traffic jams.

Hon. Members: Oh.

Mr. Rankin: What an excuse !

Mr. Ellis Smith: Is the Minister aware that the highly skilled men who are engaged on this work have kept me informed on the matter?

Headlights

Mr. Cleaver: asked the Minister of Transport whether he proposes to make a regulation for the compulsory use of dipped headlights; and if he will make a statement.

Mr. Marples: Clause 13 of the Road Traffic Bill, which is now before the House, contains provisions which would enable me to make regulations governing the use of headlamps, but it is too early to say how these powers should be used.
General guidance on using dipped headlamps is given in the Highway Code. Rule 50 says,
Use dipped headlights at night in built-up areas, unless the street lighting is good.

Mr. Cleaver: Would my right hon. Friend bear in mind that 80 million out of 125 million motorists in the world already have to do this Is he aware that the Lord Mayor of Birmingham has convened a conference of interested parties, including the police, with a view to staging a week in the city when motorists will be asked to dip their headlights? Will he take an interest in this and support it?

Mr. Marples: I shall certainly take an interest in it, and I should be glad to hear from my hon. Friend the conclusions arrived at at the Birmingham conference, but there are many different schools of thought on this question. I know that Birmingham is one of the foremost towns in the country in looking after roads and road traffic. I shall be very interested to hear the conclusions of the conference.

Mr. Paget: Can the right hon. Gentleman tell us when the central screen down M.1 will be completed so that we can use headlights there in a non-lit area?

Mr. Marples: Perhaps the hon. and learned Member will put that question on the Order Paper.

Rural Transport (Report)

Mr. E. L. Mallalieu: asked the Minister of Transport if he is aware of the hardship caused to the people of East Halton and South Killingholme by the withdrawal of local bus services; and, in view of the progressive deterioration in transport amenities in the countryside, what action he now proposes to take on the recommendations of the Jack Committee's Report.

Mr. More: asked the Minister of Transport (1) if, in implementing the recommendations of the Jack Committee on Road Transport, he will give special consideration to the sparsely populated areas; and
(2) if he will now make a statement on the recommendations of the Jack Committee on Rural Transport.

Mr. P. Browne: asked the Minister of Transport if he is now in a position to make a statement on the recommendations of the Jack Committee on Rural Transport.

Mr. Marples: I have seen no evidence that the people of these two villages are suffering hardship. I cannot say yet what action will be taken on the recommendation of the Jack Report.

Mr. Mallalieu: Is the right hon. Gentleman aware that I have had a considerable amount of correspondence from inhabitants of these villages and others by whom this service was used very considerably, and that they are upset about it? Is he further aware that this is after eleven years of a Conservative Government during which hardly a year has passed without some of the services being withdrawn from the countryside? Even if he is rather a shining example of a modern big business Tory, could he not take an interest in the countryside?

Mr. Marples: It is interesting to know that the hon. and learned Member has had a large correspondence, because this service as a whole was operating at a loss of 10d. a mile. In 1961, the operating costs were 2s. 1d. rising to 2s. 3d. a mile and the average receipts on the whole service were 1s. 3d. per mile. During a week in July, the best for many months, the average receipts for the last bus journey during the day was 4d. a mile. I do not know how many letters

the hon. and learned Member has, but should like him to send them to us.

Sir J. Maitland: On the whole of this subject, surely my right hon. Friend has no grounds to be pleased with the situation at present? Did he not write off quickly the fact that we have not yet dealt with the Jack Committee Report? Does he realise that this is a most important subject which many of us take very seriously?

Mr. Marples: I am sure that hon. Members take it very seriously, but unfortunately they do not have a unanimous view on the matter.

Mr. P. Browne: May I reinforce the argument of my hon. Friend the Member for Horncastle (Sir J. Maitland) and draw the attention of my right hon. Friend to the answer he gave in November to a question about when we could have a debate on the Jack Committee Report? He said that he realised it was a matter of extreme urgency and that he would consult the Leader of the House to see if time could be found for a debate. Has he had an answer to that question yet?

Mr. Marples: That was answered in November, when there was a debate on road transport in December, to which the Parliamentary Secretary replied.

Mr. Mallalieu: Will the Minister assure us that mere profit and loss is not to be the only consideration applied by this Government in the matter of withdrawal of rural services? Is there not such a thing as a social service whereby some of the more profitable routes can help to contribute to some of the less profitable ones?

Mr. Marples: On this particular route to which the hon. and learned Member has referred the situation is really ludicrous. The receipts are 4d. a mile, so, it cannot be extensively used. Application to withdraw the bus service was made in August. The usual notice was published and no objection was made, so the Traffic Commissioners granted the application in September.

Monorail Transport

Mr. Bossom: asked the Minister of Transport in what places in Great Britain he is investigating the possibility of


employing the monorail type of transport; and, in particular, what new proposals he has for linking London Airport to central London by monorail.

Mr. Lipton: asked the Minister of Transport what further consideration he has given to the plan for a monorail to London Airport.

Mr. Marples: I have informed the various monorail promoters that I am prepared to consider proposals for monorail transport on their merits. So far proposals have been made to me only in respect of a possible monorail link between central London and London Airport. None of the schemes put forward has been sufficiently comprehensive to permit a full assessment to be made of its possibilities.

Mr. Bossom: Will my right hon. Friend continue to give every encouragement to this project? Everyone agrees that his fly-over has been successful and has speeded up the flow of traffic, and everyone also agrees that in this supersonic age we need a quicker way of getting out to London Airport, Gatwick and other airports?

Mr. Marples: If the people who are proposing to instal a monorail will give me full and comprehensive details I will look at them, but so far they have not done that. The plans which we have for improving the road to Heath Row will speed the journey. At the moment it takes thirty-five minutes from West London Air Terminal to Heath Row, and when we have finished it will take between eighteen and twenty-five minutes from the West London Air Terminal to Heath Row, which I think is a great improvement.

Mr. Lipton: While it is encouraging to see that the Minister is prepared to look favourably upon a monorail scheme, if one is submitted to him—that is the interpretation which I place on his answer—does he not agree that he is very optimistic when he says that with all his improvements we shall be able to get to London Airport in twenty minutes by road? Is not the best long-term solution to get as much traffic as possible off the roads and to use a monorail and similar devices to transport people?

Mr. Marples: I do not know whether I am optimistic compared with the hon.

Member. I did not say that I would look favourably on such a proposal. I tried to convey to the House that I would look dispassionately and intelligently at it.

Greater London Traffic Survey

Mrs. Butler: asked the Minister of Transport to what extent his proposed traffic survey of Greater London will cover Middlesex; and what consultation he has had with Middlesex local authorities in regard to it.

Mr. Marples: The Greater London Traffic Survey covers the whole of Middlesex. The Middlesex County Council was consulted about the detailed design of the survey as it affects its area and is co-operating in drawing up the traffic zone plan for Middlesex. We have also invited all the borough and urban district councils in Middlesex to co-operate in providing any local information or help that the director of the Survey may require.

Mrs. Butler: Does not the Minister know that a number of district councils are planning their own traffic surveys in connection with schemes of redevelopment? Does he not think that it would greatly assist them and avoid duplication if he would consult directly with them about these plans at an early date?

Mr. Marples: Local authorities, generally speaking, make their traffic surveys in regard to the effect on particular local needs, which is quite understandable. This one is for London as a whole, and the results will be made known to local authorities, which will have complete freedom of access to any recommendations that are made, without any charge to them whatever

Pedal Cycles (Rear Lights)

Mr. Pym: asked the Minister of Transport whether he will revise the rules concerning rear lights on pedal cycles so that in future they will be brighter and thus contribute to greater safety on the roads at night.

Mr. Hay: My right hon. Friend has recently made Regulations for this purpose. The Road Vehicles Lighting (Amendment) Regulations, 1961, have the effect of requiring that after 18th October next all pedal cycles must have


rear lamps which were manufactured to meet the relevant British Standard specification on light output.

Mr. Pym: While thanking my hon. Friend for that reply, which I am very glad to hear, may I ask him if he thinks that this regulation will overcome the danger which motorists feel—that, against the glare of on-coming headlights, they find it extremely difficult to see these rearlights on bicycles—and does he think that this danger has now been overcome?

Mr. Hay: I hope so. The specification based on the British Standard has been drawn up with this point very much in mind.

Oral Answers to Questions — ROADS

Parking Meters, Leicester

Sir B. Janner: asked the Minister of Transport whether he has considered the report, which has been sent to him, of the Chief Constable of Leicester concerning the installation of parking meters in the centre of the city: and what advice he has given to other cities, and in particular the London boroughs, concerning ways of helping the flow of traffic and of restricting the parking of vehicles in congested areas other than by the installation of parking meters.

Mr. Marples: In 1957 my Department issued to local authorities a very full memorandum of advice on the control of traffic. My divisional road engineers are also continuously in touch with them on the subject. I have received no report directly from the Chief Constable of Leicester, but I am aware of his views on the traffic problems of that city. I am satisfied, however, that in London and many other seriously congested areas parking meters offer the best means of regulating parking. Where the parking demand is less overwhelming less rigid methods of control may be appropriate.

Sir B. Janner: Will the Minister take the trouble to read the view of the Law Society's Gazette—more or less the official organ of one of his Joint Parliamentary Secretary's—where the opinion is expressed that the scheme in Leicester is

a very good one, and where it is pointed out that with 32 wardens and the police at Leicester about 2,276 cases came before the courts in one year; whereas in one district where there were wardens only, in the course of six weeks over 1,300 cases were brought? Does the Minister realise that a lot of money could be saved and that the nerves of motorists would be strengthened if these traffic regulations were improved?

Mr. Marples: I shall certainly read the report to which the hon. Member referred, especially as it comes from legal sources and is concerned with traffic matters. The problem in London is entirely different from that of Leicester. It is of a different magnitude altogether. I do not think that the nerves of people in Leicester are being affected, and I certainly do not think that the Members of Parliament representing Leicester suffer from any nervous defect whatsoever.

Western Avenue (Acton)

Mr. Holland: asked the Minister of Transport what long-term proposals he has for the easing of traffic congestion and the protection of pedestrians in and adjacent to Western Avenue at Gipsy Corner and East Acton Circus.

Mr. Hay: A report is being prepared for the comprehensive improvement of this section of Western Avenue, including grade separation at certain major junctions. We cannot announce firm proposals until this has been considered. But as an interim measure a pedestrian subway will shortly be built at Allan Way, and others will be provided near Penryn Road and Wales Farm Road. A one-way traffic experiment is being considered to improve conditions at East Acton Circus.

Mr. Holland: I thank my hon. Friend for the encouraging part of that "curate's egg". May I ask whether he can inject a greater sense of urgency into the solving of this problem, particularly with relation to the East Acton Circus? Is he aware that, apart from the high accident rate from traffic flow in East Acton Circus, four police officers have to be taken off different work to spend two hours every evening trying to drain off the morass of congested traffic clogging this valve of the


main artery from the Metropolis to the Principality?

Mr. Hay: I do not think that anything in my Answer would justify a complaint that we are not treating this matter with urgency. We are having a report prepared on the whole of Western Avenue and we are considering on experiment in one-way traffic at East Acton Circus.

Pedestrian Crossings (Accidents)

Mr. Walker: asked the Minister of Transport what further reports have been received from the Road Research Laboratory about accidents at pedestrian crossings; what recommendations were made; and what action has been taken upon them.

Mr. Marples: Two further reports have been received. The first report compares the accident rate to pedestrians on and within 50 yards of zebra crossings. The other report surveys the risks to pedestrians crossing seven roads in West London. There are no formal recommendations in the reports, but one of them suggests that experiments be made with the provision of more zebra crossings in a sample area and with the substitution of light controlled crossings for zebra crossings. As I announced last June, I am proposing to carry out an experiment with the new push-button pedestrian crossings. I should prefer to await the outcome of this experiment before considering further the Laboratory's suggestions.

Mr. Walker: Will my right hon. Friend ask the Road Research Laboratory to comment on the suggestion about the possibility of having double white lines to the approach to pedestrian crossings?

Mr. Marples: That is another question, which I answered a few months ago. I will ask the Laboratory to look into it.

Mr. Walker: The answer given a few months ago was that the Laboratory was looking into this problem as a whole. Can my right hon. Friend say whether there was a specific comment on the possibility of double white lines?

Mr. Marples: No, not yet.

Roundabouts, Yorkshire

Mr. Kitson: asked the Minister of Transport (1) how many accidents occurred on roundabouts in Yorkshire in 1961;
(2) how many roundabouts are under construction on the A.1.

Mr. Hay: During 1961, 306 accidents involving personal injury occurred at roundabouts in Yorkshire as a whole. Three roundabouts are at present under construction on the A.1, one of which will later form part of a flyover junction. There are 10 flyover junctions now being built on this road, 10 are already in use, and a further 42 are planned.

Mr. Kitson: Is my hon. Friend aware that a good deal could be done to improve the design of many roundabouts. Is he aware that the curbstones round them are high and extremely dangerous? Will he look into the matter to see whether some improvement may be made in the near future?

Mr. Hay: I will take note of what my hon. Friend says and I should be grateful if he could give me specific instances of where this is necessary.

Mr. Kitson: One example is the Dishforth roundabout, where there were 33 accidents in 1961.

M.1 (Warnings System)

Mr. Gresham Cooke: asked the Minister of Transport (1) what is the present system of providing warnings on the M.1 of unpredictable hazards such as ice, fog or obstruction by damaged vehicles; and if he is satisfied that such a system is proving satisfactory;
(2) what consideration he has given to the provision, in cases of emergency hazards, of a system of illuminated signs along the M.1 controlled by the police from a central point or points; and what estimate of the probable cost of such a system has been obtained.

Mr. Marples: Large reflecting signs of recent design and with the legends "Ice," "Fog," "Accident" and "Roadworks" are held in readiness for immediate use when needed, and they have been generally effective. I am considering the possibility of an experiment with


remotely controlled illuminated signs. Estimates of the total cost of such a system have not yet been prepared.

Mr. Gresham Cooke: Would my right hon. Friend seriously consider this question of remotely controlled illuminated signs—say, amber lights on bridges on M.1—because if there is an accident it takes some time for the police to get out warning cones, and if there are patches of fog at the corners of roads these signs are not always visible to people on the road? In order to avoid accidents and the shunting of cars one on top of the other, it would be a help to have distant warning signs on the bridges.

Mr. Marples: I quite agree, and that is why I am carrying out the experiment.

Level Crossing, Darsham

Sir H. Harrison: asked the Minister of Transport when he hopes to replace the railway level-crossing at Darsham on the A.12 road by a bridge.

Mr. Marples: I cannot say when this scheme is likely to be included in the Trunk Road Programme. Its cost is high, and its value to traffic small compared with many other schemes.

Sir H. Harrison: Is my right hon. Friend aware that his reply will be very disappointing to people of East Suffolk'? They wonder why a great deal of money has been spent on widening bridges at Saxmundham and Martlesham on this road which did not impede traffic.

Mr. Marples: I will look into the question of the bridges which have been widened, but if contracts have been started it would be difficult to stop them. Everyone thinks that his own particular scheme is of greater value than that of anyone else.

Bishop Auckland By-pass

Mr. Boyden: asked the Minister of Transport why he did not include the main Bishop Auckland by-pass in the Durham County Council's rolling programme for the year 1963–64.

Mr. Hay: Because it was not of sufficiently high priority.

Mr. Boyden: Does the hon. Gentleman recollect that when he answered

a Question of mine of 15th November about the West Auckland by-pass he made some favourable comments and said that he would look at the question of whether it should be built in view of the economic difficulties of the area? Why has the Minister cut out of Durham County Council's rolling programme the Bishop Auckland by-pass, which is a preceding scheme of the West Auckland by-pass?

Mr. Hay: I understand that Durham County Council has put up three schemes to us for inclusion in the years, 1961 to 1964, inclusive. One of these schemes, at Holdforth, was selected for 1962–63. Another scheme, the Durham South Relief Road, was selected for the next year. No decision has yet been taken for 1964–65.

Mr. Boyden: In view of the comment which he made that it looks to be a good scheme in relation to the economic background of the area, will he see that it is included in this 1963 programme?

Mr. Hay: No, Sir. I cannot do so. A lot will depend on the state of play at the time and the views of the county council on priorities.

Accidents

Sir Richard Glyn: asked the Minister of Transport how many road accidents which involved death or serious injury occurred in the twelve months to the last convenient date; and in what proportion of these cases a driver or rider of a motor vehicle was charged with a drink offence under the Road Traffic Acts, or would have been so charged had he not been killed or seriously injured.

Mr. Marples: During the twelve months preceding 30th November, 1961, there were 77,947 fatal and serious road accidents. A driver or rider of a motor vehicle was charged with a drink offence under the Road Traffic Acts, or would have been so charged had he not been killed or seriously injured, in about one-half of 1 per cent. of these accidents.

Sir Richard Glyn: Does my right hon. Friend agree that these are remarkable figures and that they make it clear that in order to make any substantial reduction in the total number of serious accidents we must look to factors quite


different from those of driving under the influence of drink? Has his attention been drawn to researches conducted by Mr. Leeming, the Chief Surveyor of the County of Dorset?

Mr. Marples: Yes, I have read the very frequent Press reports of what Mr. Leeming says from time to time. I disagree with most of them. The Road Research Laboratory in a normal period found that one or more of the people involved, whether drivers, riders or pedestrians, had been drinking shortly before the accident in about 18 per cent. of fatal or serious accidents. We shall tackle the problem of accident rates on every front, no matter how small or how large.

A.6074 (Durham)

Mr. Grey: asked the Minister of Transport, having regard to the danger to people who have to cross the A.6074 road, Four Lane Ends to Middlestone Moor, Spennymoor, to catch buses from the east bound bus stop opposite the housing estate, whether he will revoke the derestriction order on this road.

Mr. Hay: The Durham County Council, which is the competent authority for this road, has asked my Department whether we would be prepared to agree to a 40 m.p.h. speed limit on the road. This request is being considered urgently, and I will let the hon. Member know the outcome.

Mr. Grey: While thanking the Minister for that reply, in anticipation of getting a better one later on, may I submit to him that this road is not only dangerous, but is becoming a nightmare to people wishing to cross because of the increased number of vehicles traveling at speeds of more than 50 miles an hour? May I also ask if he is aware that during the last three years there have been 44 accidents and suggest that if he does not revoke the order his safety first campaign will be a mockery?

Mr. Hay: I will certainly take note of what the hon. Member says and do what I can to speed up the consideration of this particular case.

Noel Park Estate, Wood Green

Mrs. Butler: asked the Minister of Transport what further consideration he has given to the road safety problem on

the Noel Park Estate, Wood Green; and what action he intends to take in regard to it.

Mr. Hay: Our officers discussed this matter with the borough engineer in December. I understand that the Wood Green Borough Council expects to submit shortly to my right hon. Friend fresh proposals for traffic regulations on this estate.

Mrs. Butler: Does the Minister realise that there is intense local feeling in Wood Green about the number of accidents and near-accidents on this estate? When the Minister receives this new plan from the Council, will he consider it sympathetically, bearing in mind that it has been prepared by local people with a close and long knowledge of the problems and should not lightly be turned down by Whitehall as the previous plan submitted to them was?

Mr. Hay: Obviously, we have to see the proposals before we can decide upon them, but we always take the very closest notice of what is said by people preparing such plans who, as the hon. Lady says, have intimate local knowledge of the circumstances.

A.2 (Gypsies)

Mr. Dodds: asked the Minister of Transport what was the nature of the reply received from the Dartford Rural District Council to the letter sent by his Department in respect of the depositing by that council of a large number of caravans, lorries and sundry other articles on the grass verge of the A.2 trunk road, near Dartford, on 20th January.

Mr. Hay: I understand that, in accordance with the council's standing orders, my Department's letter has been referred to the appropriate committee. We expect to receive a reply after this committee's next meeting, which will be taking place shortly.

Mr. Dodds: Does the hon. Gentleman realise that this was a rowdy meeting and that it was a dodge which put the matter off until the next meeting? Does he appreciate that the meeting will not be held for one month? Is he not aware that 300 people are living on the verge of one of our busiest roads and that deaths are expected at any moment? Is


the Ministry going to be so spineless as to allow a council to act like this, having broken the law in Section 128 of the Highways Act? Cannot he do something about it and not wait a month? What would happen to an individual if he put something on the verge of a highway'? What will he do about it?

Mr. Hay: The hon. Gentleman has put a number of supplementary questions, and I cannot promise to answer them all.[HON. MEMBERS: "Answer one."] We have drawn the attention of the Council, whom we regard as primarily responsible in this matter, to the fact that these people have been put on the verge of a trunk road without any authority. We must go through the normal processes here, and we have asked the council to deal with the matter urgently. I understand that the next meeting of the appropriate committee is on 27th February, and I think we must give it the opportunity to have second thoughts on this matter and to take the action which we have asked it to take.

Mr. J. Wells: Is my hon. Friend aware that Dartford is not in the Erith and Crayford constituency? Will he please give such assistance as his Department can to all councils which have problems of gypsies on the highway?

Mr. Hay: The question of the problems of gypsies goes a little wider than my right hon. Friend's responsibilities. He is concerned here because these people have been allowed to go on the verge of a trunk road. I think that I should go far beyond the bounds of my right hon. Friend's responsibilities if I were to deal with the whole of this subject today.

Mr. Mellish: Is the Minister aware that these people have been made to go where they are at the moment and to break the law? Apart from all these arguments which we have read about, is the Parliamentary Secretary aware that most people are horrified that human beings can be treated in this way?

Mr. Dodds: asked the Minister of Transport if he will arrange, as a matter of urgency, for litter bins to be provided for the use of the people occupying caravans deposited on the verge of the A.2 trunk road near Dartford and also for

the clearing of these bins at suitable intervals to ensure that this section of the trunk road is as free from litter as possible.

Mr. Hay: No, Sir. It is not the responsibility of my right hon. Friend to provide litter bins on trunk roads, except at lay-bys. Local authorities, however, have power to provide litter bins on highways, with the consent of the highway authority. The clearing of litter bins is a matter for the local authority.

Mr. Dodds: Is it not a fact that the Kent County Council has refused to act as agents in this particular case? Is it not revolting that for one month come Saturday 300 people have been on the verge of the road without toilets, without dustbins and without litter bins? How can this go on in this country in 1962? Will not the Government do something about it?

Mr. Hay: As I said in my original Answer, these matters are not the responsibility of my right hon. Friend.

Mr. Dodds: They are your roads. Why do not you do something about it?

London Traffic (Special Measures)

Mr. Walker: asked the Minister of Transport whether he was satisfied with the measures introduced to speed the flow of London traffic on Monday, 5th February; and whether he intends to make some of these measures permanent.

Mr. Marples: The results of these measures varied considerably. I am discussing with the Commissioner of Police whether some of them should be reintroduced in normal circumstances.

Mr. Walker: Is my right hon. Friend aware that the motoring public is generally appreciative of the success of these measures and would like to congratulate the police authorities and officials concerned on implementing them so well? Can he consider the possibility of trying similar methods, perhaps for a complete week, so that full information on their success can be obtained?

Mr. Marples: Some of these measures were extremely successful and others were not successful. It largely depends on the number of small improvements to


the road system which can be carried out, such as altering a refuge or smoothing out a corner, which demonstrated quite clearly that if we go into these improvements very carefully we can get an enormous dividend from them. In principle, there is no doubt that the one-way system would be very much better than having two-way traffic.

Mr. Lipton: Was not one of the most important contributing factors towards the traffic flow on 5th February the fact that many private motorists were frightened of bringing their cars into London on that day?

Mr. Marples: That was a contributory factor, but not the only one.

Sir J. Duncan: Can my right hon. Friend say how many pedestrians were killed and injured as a result of this new system of one-way roads in the West End? If he intends to go on with the scheme, will he make quite certain that the interests of pedestrians are safeguarded?

Mr. Marples: I could not answer that without notice, but I know that on the Tottenham Court Road—Gower Street one-way system the traffic is now nearly twice as fast as it was, accidents are 70 instead of 100, and the roads can now carry 30 per cent. more capacity. Therefore, I should have thought that the one-way system has proved itself successful.

Marlow Bridge

Mr. John Hall: asked the Minister of Transport if he is aware that Marlow Bridge is deteriorating rapidly; and if, in view of this, he will announce his decision about the future of this bridge.

Mr. Marples: I appreciate the need for an early decision. But as my hon. Friend knows, I have promised first to consult the many local and other interests. I hope soon to start these consultations.

Mr. Hall: Is my right hon. Friend aware that if I said I was disappointed with that answer it would be the understatement of the week? Is he further aware that it is now over five years since the two county councils concerned agreed that this bridge should be repaired and preserved? Will not the Minister say something, even if it is only "Goodbye"?

Mr. Marples: I am very grateful for my hon. Friend's qualified support, but I am bound to say that we are in very close contact with the councils. On the question of the Marlow Bridge there is a diversity of opinion between a large number of people and the authorities. All I can say is——

Mr. Manuel: "Cheerio".

Mr. Marples: —that the analysis of the traffic survey and consultation was completed by the Buckingham County Council last December. So we have not been slow. Perhaps the council has.

Bradford Road, Riddlesden

Mr. Worsley: asked the Minister of Transport whether he will impose a 40 miles per hour speed limit on the stretch of Bradford Road in Riddlesden, which is at present derestricted.

Mr. Hay: Yes, Sir. We shall shortly be giving notice of our intention to impose a 40 m.p.h. speed limit.

Lighting

Mr. Dempsey: asked the Minister of Transport if he is aware of the diverse nature of public lighting on trunk roads; and if he will encourage lighting authorities to provide a uniform type of public lighting in due course.

Mr. Marples: Yes, Sir. That is why I encourage lighting authorities to provide on trunk roads a uniform standard of illumination and to avoid sharp differences between adjoining lengths.

Mr. Dempsey: Has the Minister also consulted the Road Users' Association to ensure that, whatever standard type of public lighting is approved, it will be acceptable to all concerned and satisfy all the interests that it is the best form of accident prevention lighting which we can possibly have on our highways at present?

Mr. Marples: Yes. Representatives of road users were on the recent Committee which recommended on uniform street lighting.

Sir Richard Pilkington: Is my right hon. Friend aware that by far the best sort of lighting, whether it is raining or whether it is dry, is what I think is called the red sodium lighting?

Mr. Marples: The best sort of lighting varies with the circumstances of the particular road. If there are trees, one sort of lighting is needed. If there are not trees, another sort of lighting is preferable. The type of lighting wanted really depends on the circumstances.

Mr. Manuel: Does the Minister recognise that at some school crossings on trunk roads no lighting is provided? Will he look into this matter, because during the winter months there are traffic wardens conducting school children across these crossings and motorists come upon them in inadequate lighting conditions?

Mr. Marples: If the hon. Gentleman would give me particulars of any case he has in mind where these dangerous conditions apply, I will certainly look into it.

Cornwall

Mr. Hayman: asked the Minister of Transport whether he will permit the Cornwall Highways Committee to carry out more improvement schemes before the end of the current financial year.

Mr. Hay: A further grant of £20,100 was issued recently to Cornwall County Council for small schemes. My right hon. Friend is also issuing a grant of £36,750 to the county for a scheme on A.39 near Penryn. This will bring the county's total grant for classified roads in this financial year to £236,500. In addition, trunk road schemes committed so far within the county in the current financial year are expected to cost some £133,000.

Mr. Hayman: I thank the Parliamentary Secretary for that answer, but will he bear in mind that the Cornwall Highways Committee could carry on many more small improvement schemes if the Government released grants for them before the end of the financial year, that unemployment tends to increase in Cornwall at this time of the year, and that these small improvement schemes are a very valuable factor towards securing road safety?

Mr. Hay: Yes, we are aware of all those factors.

London-Yorkshire Motorway (Leicestershire)

Sir B. Janner: asked the Minister of Transport what is the present position with regard to the Leicestershire portion of the London-Yorkshire motorway.

Mr. Hay: We have continued to make good progress with the statutory processes and the engineering preparation of this motorway. If all goes well, we hope to let contracts for the first sections, in Northamptonshire and Leicestershire, this summer.

Sir B. Janner: Will the Minister say that the hope is a definite undertaking that something will be done? Does he realise that people nowadays are beginning to ask whether he is dealing with the M.1 road or with the "long, long trail"?

Mr. Hay: If I had been able to give a definite undertaking I should have given it. I must stick to the word in my Answer—"hope".

Mr. Warbey: As we now have rather more definite information, can the Minister say how far this first section will be carried? Will it be carried so far as to by-pass Nottingham?

Mr. Hay: I cannot without notice give the hon. Member that information. The first section will not carry traffic beyond Leicester, but I should like to have notice before replying about the exact ending point of this first section.

Mr. Darling: Can the Parliamentary Secretary give any information about when he hopes the whole thing will be finished and we get the road up to Yorkshire?

Mr. Hay: No, not at this stage.

Merseyside

Mr. A. J. Irvine: asked the Minister of Transport whether he has received a report of matters arising at a conference, attended by officials from his Department, which was held in Liverpool on 18th January to consider Merseyside transport problems; and what action is being taken.

Mr. Marples: Yes, Sir. I understand that the local authorities have agreed to set up a steering committee to consider


highway and traffic matters and the coordination of transport on Merseyside, and they have asked their chief officers to advise, within two months, on what technical sub-committees are necessary to deal with these problems.

Mr. Irvine: I am obliged for that answer. Will the right hon. Gentleman give an assurance that he will do whatever he can to ensure that the whole matter is speedily dealt with?

Mr. Marples: Yes, I certainly can give that assurance. The hon. and learned Gentleman and I are Members for Merseyside. I hope that they will follow the rest of the country and have a Committee that will co-ordinate traffic over the whole physical area.

BALLOT FOR NOTICES OF MOTIONS

Elderly Ratepayers (Financial Burden)

Mr. Ridsdale: I beg to give notice that on Friday, 2nd March, I shall call attention to the financial burden being placed on elderly ratepayers and the need to look at alternative methods of local government finance; and move a Resolution.

Primary Education

Mr. Holland: I beg to give notice that on Friday, 2nd March, I shall call attention to certain aspects of primary education; and move a Resolution.

Unemployment, North-East

Commander Kerans: I beg to give notice that on Friday, 2nd March, I shall call attention to the high rate of unemployment in the North-East; and move a Resolution.

VACCINATION

3.32 p.m.

Dr. Donald Johnson: I beg to move,
That leave be given to bring in a Bill to make compulsory the vaccination of infants under the age of six months; and for purposes connected therewith.
It is only two days ago, consequent on Questions in connection with the recent smallpox epidemic, that my right hon. Friend the Minister of Health announced his aim to achieve a routine of 100 per cent. infant vaccination in this country. I can safely say that, in the light of the dangers of this disease, the vast majority of hon. Members will agree that this is a desirable objective. My proposed Bill is designed to strengthen the Minister's hand in this respect.
It is a short Bill and contains two Clauses. The first provides that the parent of every child born in England and Wales shall, within six months after the birth of the child, cause it to be vaccinated against smallpox. The second is the conscience Clause and since many hon. Members will be interested in it I will read it in detail. It states:
Any person failing to carry out the duty imposed by the foregoing Section shall be liable to a penalty not exceeding ten pounds, but no parent or other person shall be so liable if within six months after the birth of the child he makes a declaration in writing that he conscientiously believes that vaccination would be prejudicial to the health of the child, and within seven days thereafter delivers or sends by post the declaration to the local health authority of the district.
One could not have anything very much more widely drawn than that as a con- science Clause. It is drawn so widely, in fact, that it almost makes the word "compulsory" something of a misnomer in respect of the Bill.
It provides, however, two things: first, that it will be an easy business for the authorities to keep a register of those who have and have not been vaccinated; and, secondly, it places the onus on the parents to make the decision so that at least they must think and reflect on the matter. We are all so familiar with the difference between "contracting in" and "contracting out" in other contexts that I need not dwell on this subject.
I must admit that so far I have had some difficulty in convincing my right


hon. Friend of the necessity of a provision of this character, for I understand that he wishes to keep it on a voluntary basis. The historic powers of compulsory vaccination, which dated back to 1867, were abolished by the 1946 National Health Service Act and despite the very low figure at the moment—of only 41 per cent. of vaccinations—my right hon. Friend still wishes to keep it on a voluntary basis and not to reintroduce any compulsory powers.
I understand that my right hon. Friend has two main reason for this. First, he feels that vaccination against smallpox is on a par with other inoculations and vaccinations which are all provided for on a voluntary basis. In answer to that, I submit that smallpox is a distinctive disease. It has a higher death rate than any of the other diseases, serious though they may be. Further, it is a very horrible disease indeed in its serious form. Likewise, it has a greater infectiousness which occurs in an extremely capricious sort of way.
Perhaps I might quote the case of the Pakistani girl in Bradford, which arose during the recent epidemic. Not until after death was this recognised as a case of smallpox, when a number of other cases were traced back to this patient, who had originally been diagnosed as suffering from malaria. Then there is the case, a few years ago, of the R.A.F. officer who came home from Pakistan, who brought the infection home in his clothes and who infected members of his family. This is the type of infectious disease we are up against, and the dangers of which are recognised throughout the world.
The arguments I have adduced are, for instance, recognised in the International Certificate of Vaccination and I can proudly display one of these certificates as my own possession. The certificate provides for smallpox alone as a compulsory vaccination as distinct from the other diseases with which we here are familiar. The other diseases on the certificate are yellow fever and cholera with which, fortunately, we are not yet concerned in this country.[HON. MEMBERS: "Not yet?"] Not to the same extent, as yet.
The second reason is that it is represented that the percentage of vaccinations has not changed very much

between 1946—when they were compulsory—and now. The qualification to that statement is that after 1948, when compulsory vaccination was abolished, the numbers dropped by 14 per cent. from 41 per cent. to about 27 per cent., and only gradually recovered over some years of health propaganda. A figure of 41 per cent. has, however, not been enough to prevent the state of near-hysteria we have recently seen in the demand in various parts of the country for vaccination.
Voluntary vaccination figures are highly variable. In my own constituency of Carlisle it is 75 per cent., while in other parts it is as low as 19 per cent. or 20 per cent. We should do very much better than that in the new circumstances, because we must remember that one of the reasons why the figures were so low in the days of compulsion was that a visit from the public vaccinator and getting free vaccination involved a visit from the Poor Law doctor, as generally the two offices were held by the same person.
We have in addition, however, what the scientists like to call a "control experiment". For, although vaccination became voluntary in England and Wales it remained compulsory in Northern Ireland, and I can give comparative figures for the two countries. In 1958, the percentage of vaccination in Great Britain was 44·5; in Northern Ireland, 80·3. In 1959–45 per cent, in Great Britain and 73·9 per cent. in Northern Ireland. In 1960—Great Britain, 41·3 per cent.; Northern Ireland, 80 per cent. We want to do as well as or better than Northern Ireland in our vaccination figures.
We need to achieve such figures not only for our own safety, but also because of our international obligations, because this has become an international matter. I have received a lot of correspondence about my proposed Bill. The writers either agree or disagree with compulsory vaccination, but even those who disagree emphasise that we should protect ourselves by insisting on people who come into this country producing vaccination certificates. On Monday, we even had the hon. Lady the Member for Blackburn (Mrs. Castle) asking us to insist on people from Europe producing vaccination certificates. But how can we


make such a demand and yet contract out of compulsion ourselves?
Therefore, for our own protection and that of our infant population, and because of our moral obligations to other countries, I hope that the Motion will receive the favour of the House.

3.43 p.m.

Dr. J. Dickson Mabon: I oppose the Motion, but I want to make it clear that I do not at all dissent from the argument that all infants under six months should be vaccinated, and that parents should be so advised. The proposed Bill, however, is the wrong way of going about things.
It is rather extraordinary that we should find the hon. Member for Carlisle (Dr. D. Johnson)—the champion of liberty—wanting to adopt the authoritarian approach that the Bill would imply. A Parliamentary Answer given a few weeks ago confirmed that the pre-war figures, when vaccination was compulsory—including the conscience Clause, which the hon. Member would concede in his Bill—were little different from present voluntary vaccination figures.
I agree wholeheartedly with the hon. Member if he complains that the Government have so far been unwilling or unable to promote the propaganda necessary to induce people to have their children vaccinated. I am only sorry that he has not directed more of his criticisms to his right hon. Friend the Minister of Health but, instead, is trying to impose a new law of compulsion on people.
It is perfectly clear to many of us that a lot of this trouble has arisen from the scare over smallpox consequent on the recent Pakistani incident in Bradford, but the same thing could well have happened had the person concerned been a Manchester businessman. He could have arrived from Karachi by plane and gone straight back to Manchester, or anywhere else, and could well have brought the infection with him. That case was not an argument in favour of compulsion, but one in favour of making available better port-of-entry

health-checking facilities, and promoting propaganda in favour of voluntary vaccination.
We have the experience of the immunisation campaigns against poliomyelitis and diphtheria. Both of those campaigns were admirable, both were overwhelmingly successful, and both consisted of an appeal to people's intelligence and good sense, and not of putting their backs up by making immunisation compulsory except on grounds of conscience.
Unfortunately, the hon. Gentleman has once again acted in the face of the medical profession. There is no general demand among doctors for the return of compulsory vaccination, but there is a demand among them for the Ministry to do more to publicise protection. The General Medical Services Committee recently decided to postpone discussion of immunisation procedures against all diseases until the present scare had died down, because many people feel that an attempt is being made—and I hope that the hon. Gentleman can dissociate himself from it—to gain some dubious party political capital out of present difficulties—[HON. MEMBERS: "Oh."] The hon. Member for Birmingham, Selly Oak (Mr. Gurden) charged my party with being responsible for those deaths. A more unscrupulous and disgusting accusation I have never heard of, and I resent it very much——

Mr. Harold Gurden: Mr. Harold Gurden (Birmingham, Selly Oak) rose——

Dr. Mabon: I cannot give way. The hon. Gentleman made that charge against my party on Monday. He made a personal charge against all of us, and I resent it. It is wrong that such a thing should become the shuttlecock of party politics.
We should recognise that the Minister himself does not favour the proposed Bill; that it is retrogressive; that it is against the whole idea of modern medicine, and that it is not wanted by the medical profession. I hope that the House will reject the Motion.

Mr. Gurden: On a point of order, Mr. Speaker. I should like your guidance on whether or not I am entitled to make a


denial of a statement that was quite untrue.

Mr. Speaker: It is not a point of order, and there is no such procedure known to the House as a point of guidance.

Question put, pursuant to Standing Order No. 12 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 77, Noes 186.

Division No. 89.]
AYES
[3.48 p.m.


Agnew, Sir Peter
Harrison, Brian (Maldon)
Prior-Palmer, Brig. Sir Otho


Allason, James
Hendry, Forbes
Rankin, John


Barlow, Sir John
Herbison, Miss Margaret
Reid, William


Beamish, Col. Sir Tufton
Hill, J. (Midlothian)
Roberts, Goronwy (Caernarvon)


Bence, Cyril
Hocking, Philip N.
Robertson, Sir D. (C'thn's &amp; S'th'ld)


Bennett, J. (Glasgow, Bridgeton)
Howard, John (Southampton, Test)
Shaw, M.


Biggs-Davison, John
Iremonger, T. L.
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Bishop, F. P.
Jennings, J. C.
Stodart, J. A.


Bossom, Clive
Johnson, Dr. Donald (Carlisle)
Stoddart-Scott, Col. Sir Malcolm


Box, Donald
John, Eric (Blackley)
Storey, Sir Samuel


Broughton, Dr. A. D. D.
Johnson Smith, Geoffrey
Talbot, John E.


Browne, Percy (Torrington)
Kerans, Cdr. J. S.
Tapsell, Peter


Clark, William (Nottingham, S.)
Kerby, Capt. Henry
Thomas, George (Cardiff, W.)


Cleaver, Leonard
King, Dr. Horace
Tiley, Arthur (Bradford, W.)


Cooper, A. E.
Kitson, Timothy
Turton, Rt. Hon. R. H.


Crowder, F. P.
Langford-Holt, Sir John
Tweedsmuir, Lady


Digby, Simon Wingfield
Lawson, George
Vickers, Miss Joan


Dodds, Norman
Leather, E. H. C.
Walker, Peter


Donaldson, Cmdr. C. E. M.
Lucas, Sir Jocelyn
Watkins, Tudor


Doughty, Charles
Maclean, Sir Fitzroy (Bute &amp; N. Ayrs.)
Webster, David


Duncan, Sir James
McMaster, Stanley R.
Williams, Lt. (Abertillery)


Emery, Peter
Manual, A. C.
Wilson, Geoffrey (Truro)


Farey-Jones, F. W.
Mapp, Charles
Wise, A. R.


Forrest, George
Maydon, Lt.-Cmdr. S. L. C.



Goodhew, Victor
Mott-Radclyffe, Sir Charles
TELLERS FOR THE AYES:


Gresham Cooke, R.
Plummer, Sir Leslie
Mr. Gower and Mr. Gurden.


Harris, Frederic (Croydon, N.W.)
Popplewell, Ernest





NOES


Allaun, Frank (Salford, E.)
Fernyhough, E.
Jones, T. W. (Merioneth)


Allen, Scholefield (Crewe)
Finlay, Graeme
Joseph, Sir Keith


Arbuthnot, John
Fisher, Nigel
Kenyon, Clifford


Awbery, Stan
Foot, Dingle (Ipswich)
Kershaw, Anthony


Bellenger, Rt. Hon. F. J.
Foot, Michael (Ebbw Vale)
Key, Rt. Hon. C. W.


Benson, Sir George
Forman, J. C.
Kimball, Marcus


Black, Sir Cyril
Fraser, Thomas (Hamilton)
Kirk, Peter


Blackburn, F.
Galpern, Sir Myer
Leburn, Gilmour


Blyton, William
Glyn, Sir Richard (Dorset, N.)
Lee, Frederick (Newton)


Bourne-Arton, A.
Gordon Walker, Rt. Hon. P. C.
Lewis, Arthur (West Ham, N.)


Bowles, Frank
Grant, Rt. Hon. William
Lilley, F. J. P.


Boyden, James
Green, Alan
Lindsay, Sir Martin


Brockway, A. Fenner
Griffiths, David (Rother Valley)
Lipton, Marcus


Bromley-Davenport, Lt.-Col. Sir Walter
Grimond, Rt. Hon, J.
Litchfield, Capt. John


Brooke, Rt. Hon. Henry
Hale, Leslie (Oldham, W.)
Longbottom, Charles


Brooman-White, R.
Hall, Rt. Hn. Glenvil (Colne Valley)
Mabon, Dr. J. Dickson


Brown, Rt. Hon. George (Belper)
Hamilton, Michael (Wellingborough)
McCann, John


Brown, Thomas (Ince)
Hamilton, William (West Fife)
MacColl, James


Bryan, Paul
Harrison, Col. Sir Harwood (Eye)
McInnes, James


Butler, Herbert (Hackney, C.)
Hart, Mrs. Judith
McKay, John (Wallsend)


Butler, Mrs. Joyce (Wood Green)
Harvey, Sir Arthur Vere (Macclesf'd)
McLaren, Martin


Campbell, Gordon (Moray &amp; Nairn)
Hay, John
Maclay, Rt. Hon. John


Cary, Sir Robert
Hayman, F. H.
McLeavy, Frank


Castle, Mrs. Barbara
Heald, Rt. Hon. Sir Lionel
Macleod, Rt. Hn. Iain (Enfield, W.)


Channon, H. P. G.
Henderson, Rt. Hn. Arthur (Rwly Regis)
MacPherson, Malcolm (Stirling)


Chataway, Christopher
Hicks Beach, Maj. W.
MacPherson, Niall (Dumfries)


Costain, A. P.
Hill, J. E. B. (S. Norfolk)
Maddan, Martin


Craddock, George (Bradford, S.)
Holland, Philip
Maitland, Sir John


Cullen, Mrs. Alice
Holman, Percy
Marten, Neil


Dance, James
Holt, Arthur
Mason, Roy


Davies, S. O. (Merthyr)
Howell, Denis (Small Heath)
Matthews, Gordon (Meriden)


d'Avigdor-Goldsmid, Sir Henry
Hughes, Emrys (S. Ayrshire)
Mayhew, Christopher


Dempsey, James
Hughes-Young, Michael
Millan, Bruce


Diamond, John
Hutchison, Michael Clark
Mitchison, G. R.


Donnelly, Desmond
Hynd, John (Attercliffe)
Moore, Sir Thomas (Ayr)


Drayson, G. B.
Irving, Sydney (Dartford)
Nabarro, Gerald


Ede, Rt. Hon. C.
Jackson, John
Noel-Baker, Rt. Hn. Philip (Derby, S.)


Eden, John
James, David
Oakshott, Sir Hendrie


Edwards, Robert (Bilston)
Jenkins, Robert (Dulwich)
Oliver, G. H.


Emmet, Hon. Mrs. Evelyn
Jones, Rt. Hn. A. Creech (Wakefield)
Oram, A. E.


Erroll, Rt. Hon. F. J.
Jones, Elwyn (West Ham, S.)
Oswald, Thomas




Pannell, Charles (Leeds, W.)
Ross, William
Thomson, G. M. (Dundee, E.)


Partridge, E.
Sharples, Richard
Thorneycroft, Rt. Hon. Peter


Pearson, Arthur (Pontypridd)
Shepherd, William
Thornton, Ernest


Pearson, Frank (Clitheroe)
Shinwell, Rt. Hon. E.
Tilney, John (Wavertree)


Peel, John
Silverman, Julius (Aston)
Timmons, John


Pentland, Norman
Silverman, Sydney (Nelson)
Touche, Rt. Hon. Sir Gordon


Peyton, John
Skeffington, Arthur
van Straubenzee, W. R.


Pott, Percivall
Slater, Mrs. Harriet (Stoke, N.)
Wade, Donald


Powell, Rt. Hon. J. Enoch
Small, William
Wakefield, Edward (Derbyshire, W.)


Price, J. T. (Westhoughton)
Smith, Ellis (Stoke, S.)
Weitzman, David


Probert, Arthur
Smithers, Peter
Wells, Percy (Faversham)


Proudfoot, Wilfred
Snow, Julian
White, Mrs. Eirene


Pym, Francis
Spearman, Sir Alexander
Wilkins, W. A.


Redmayne, Rt. Hon. Martin
Steele, Thomas
Williams, W. R. (Openshaw)


Renton, David
Stewart, Michael (Fulham)
Willis, E. G. (Edinburgh, E.)


Reynolds, G. W.
Symonds, J. B.
Woodburn, Rt. Hon. A.


Rhodes, H.
Taylor, Bernard (Mansfield)
Woodnutt, Mark


Ridsdale, Julian
Taylor, Sir Charles (Eastbourne)
Woof, Robert


Roberts, Albert (Normanton)
Teeling, Sir William
Yates, Victor (Ladywood)


Robertson, John (Paisley)
Temple, John M.



Robinson, Kenneth (St. Pancras, N.)
Thomas, Iorwerth (Rhondda, W.)
TELLERS FOR THE NOES:


Ropner, Sir Leonard
Thompson, Dr. Alan (Dunfermline)
Mr. Hannan and Mr. H. Hynd.

PRIVATE MONOPOLIES

3.57 p.m.

Mr. Douglas Jay: I beg to move,
That this House deplores the timid and complacent attitude of Her Majesty's Government towards the growth of private monopoly in Great Britain and their refusal to safeguard the public interest by instituting a public inquiry into the proposed merger of Imperial Chemical Industries and Courtaulds.
It is high time that the House debated the alarming new growth in recent months of private monopoly and monopoly practices in British industry, and the total failure of the President of the Board of Trade to do anything to stop it.
The issue before us today is not simply the right hon. Gentleman's policy of unconditional surrender when faced with either I.C.I. or Imperial Tobacco. It is the new and accelerated rush towards monopoly by mergers and takeover bids over a very wide area of British industry. Mr. Clore's original take-over bids, or some of them, anyway, were originally defended as likely to stimulate sleepy managements to make better use of idle assets. But almost all the take-over bids during the past twelve months, from the Daily Mirror—Odhams one onwards, have been openly designed to limit competition and have been defended as such.
The Financial Times tells us that in 1961 there were 534 successful take-over bids or mergers, involving a total capital of £800 million, or, if we leave out the Ford deal, over £600 million. The I.C.I.-Courtaulds battle and Mr. Clore's bid for Saxone-Lilley and Skinner, although they have, naturally, caught

the public eye, should not blind us to the fact that there is a general rush towards monopoly which has gathered strength in the last two years; nor should we ignore, incidentally, the Report of the Registrar of Restrictive Practices about what are called price information agreements, which suggests that some trades may be getting round the Restrictive Practices Act by this legal device and, in fact, introducing price rings by the back door.
In face of all this, the Government are doing nothing at all. What a contrast this is with all the brave words so often heard at election times about competitive private enterprise. The Prime Minister signed a manifesto before the last election called "Onward in Freedom", which has a rather bedraggled lion on the cover, and which promised that
the fresh winds of freedom and opportunity
would
blow through the economy
under a Tory Government.
The attitude of the present President of the Board of Trade is in glaring contrast even with that of his predecessor, the present Minister of Aviation, whom we have with us today, when he introduced the Restrictive Trade Practices Act six years ago. In moving the Second Reading of the Bill, the right hon. Gentleman then said that it would become
a powerful reinforcement to the system of free and flexible competitive enterprise which we on this side seek to foster and sustain."—[OFFICIAL REPORT, 6th March, 1956; Vol. 549, c. 1943.]

Hon. Members: Hear, hear.

Mr. Jay: I am glad that hon. Members agree, because now we are told a quite different story, that ever greater private monopolies are necessary to compete abroad, and the President of the Board of Trade tries to justify his inaction over I.C.I. by suddenly invoking this new argument. I shall come presently to the question whether it be a good or a bad argument, but it is at least a very different tale from the one about "free and flexible competitive enterprise".
Indeed, the right hon. Gentleman is not merely much more inert and reactionary than his right hon. Friend the Minister of Aviation; he is actually more timid even than Lord Swinton, who spoke in another place, on 1st February, much more positively about this matter and who was President of the Board of Trade in a Tory Government nearly forty years ago. This is the progress we have under the party opposite.
Let us look for a moment at the three main monopoly dangers which have arisen even in the short time since Parliament went into recess before Christmas. These are the Imperial Tobacco, the British Shoe Corporation and the I.C.I.-Courtauld battle.
In giving his decision about Imperial Tobacco, the President of the Board of Trade treated the House deplorably. The main recommendation of the Monopolies Commission about Imperial Tobacco was that it should sell its shares in Gallaher. The Commission's Report was presented to Parliament in July. It is, in fact, dated 6th January, 1961; so perhaps the President of the Board of Trade will tell us whether it was in his hands last January. At any rate, from July onwards he repeatedly refused to announce any decision, and even when pressed at Question Time on Thursday morning, 21st December, he said that he could not add to his previous evasive replies. Then, on 28th December, when Parliament was not sitting, he announced to the Press that he was turning down flat the main recommendation of the Commission.
I can well understand the right hon. Gentleman being so ashamed of this cowardly decision that he dared not openly admit it to the House. But does

he expect us to believe that a Cabinet meeting was held on 27th December, the day after Boxing Day, to decide this matter or, perhaps, that he himself came into his office that day and experienced a guiding light which had eluded him ever since the previous July, or even, perhaps, since the previous January? Of course, everyone will conclude that the President of the Board of Trade reached his decision before Christmas, but dared not announce it until, as he hoped, as few people as possible would notice what he had done. His difficulty is that he is nearly as frightened of the House of Commons as he is of Imperial Tobacco. I wish that he would remember that he is responsible not to Imperial Tobacco, but to the House of Commons.
The decision itself is as deplorable as the right hon. Gentleman's method of announcing it. The Monopolies Commission spent over four years investigating the tobacco industry. It found that the Imperial Tobacco Company, which sells about 60 per cent. of the tobacco and cigarettes bought in this country and which has, of course, close links with the British-American Tobacco Company and a number of others in the industry, held also a hitherto secret 42½ per cent. share interest in its main rival, Gallaher. The Commission recommended that that holding should be sold on the ground that it was calculated to curtail competition.
The President of the Board of Trade, after another five months' thought, or perhaps after twelve months' thought—I hope he will tell us—decided, although he accepted some minor recommendations of the Commission, that, contrary to its major recommendation, the shares should not be sold. The reason he gave in a Written Answer to me last week is that Imperial Tobacco have given him an undertaking not to interfere with the management of Gallaher. But, of course, Imperial Tobacco gave that undertaking to the Commission, and the Commission explicitly stated that it was no justification for Imperial continuing to hold the Gallaher shares.
After all, if Imperial Tobacco—I accept the assurance—really does not intend to interfere in the Gallaher management, why has it fought so desperately hard all these months to


hang on to the Gallaher shares? Presumably, because Imperial regards its shareholding as an investment hedge against possible further loss of markets to Gallaher.
On this point, the Commission, in paragraph 547 of its Report, said:
We consider that the stimulus to efficiency which Gallaher's competition provides might have been even greater if Imperial were not through its investment in Gallaher insured to some extent against the potential loss of profit
and, accordingly, the Commission came to the view that the shareholding operated against the public interest.
All the President of the Board of Trade can find to say in reply to this recommendation of the Commission is that Imperial Tobacco
could have no assurance that trade lost by them would be gained by Gallaher".—[OFFICIAL REPORT, 6th February, 1962: Vol. 653, c. 34.]
But everyone knows that as Gallaher is Imperial Tobacco's main rival, this is the overwhelming probability. I put the question to the President of the Board of Trade: if Imperial Tobacco did not think that this was so, why did it fight such a hard battle to retain the shares?
What the President has done is to turn down flat the main recommendation of the Monopolies Commission, and in so doing he has damaged the future authority of the Commission, which the Government have considerably weakened already throughout the last five years.
Even the Investor's Chronicle comment was that industry in future would, as a result, regard the Commission as a sheep in wolf's clothing. The Government's failure to protect the public here has been condemned by practically every newspaper, including the Investor's Chronicle, the Financial Times and The Times. The right hon. Gentleman now holds an extreme position, even among Conservative opinion, in defence of private monopoly. What a contrast this all is with the propaganda about "free and flexible competitive enterprise".
Meanwhile, Mr. Clore is busy strengthening his grip on the boot and shoe trade, encouraged, I should imagine, by the right hon. Gentleman's feeble attitude towards more established monopolies. Sears Holdings, Mr. Clore's holding company, now controls not merely vast property interests which

we all know about, but interests in footwear, shipbuilding, hosiery, mining machinery, jewellery, electronics, structural steel, silverware, theatres and car distribution, to name only a few. It is not very clear how greater economy and efficiency are gained by integration of this sort.
But it is to this empire that Mr. Clore's satellite, the British Shoe Corporation, is now seeking to add again its main rival, Saxone-Lilley and Skinner. Already, the British Shoe Corporation is easily our largest shoe manufacturer and retailer, and Saxone comes second.

Sir Cyril Osborne: Not manufacturer.

Mr. Jay: These two combined would own 2,000 shoe shops and over 30 factories and would control over 20 per cent. of our shoe supplies.

Sir C. Osborne: I am sure that the right hon. Gentleman has no wish to mislead the House. The Clore group is by far the biggest distributor of shoes, but not the biggest manufacturer.

Mr. Jay: I do not wish to mislead the House, but it is a very big manufacturer. The Financial Times said that it is the largest manufacturer. However, we need not argue too much about that. If this combine went ahead, it would control over 20 per cent. of our shoe supplies and about half of the supplies sold through multiple shops.
Will this bring a fresh wind of freedom and opportunity into the shoe trade? Obviously, it will limit the choice of the consumer, because I think that the hon. Member for Louth (Sir C. Osborne) will agree that the housewife may imagine that she is choosing between Freeman, Hardy and Willis, Dolcis, Saxone, and Lilley and Skinner, but really it is Mr. Clore all the time. This puts enormous power into the hands of one group, controlled in this case very largely by one man. Yet, in answer to a Question which I put to him, the President of the Board of Trade said that he did not propose to do anything about it.
Since the Chancellor of the Exchequer—and presumably the Chief Secreary to the Treasury who is, for some reason, to reply to the debate tonight—is worried


about wages and salaries rising so quickly, it is worth pointing out that another by-product of all these mergers and take-over bids is the building up of vast personal fortunes by capital gains. During the last ten years of Tory freedom, ending with the year of the pay pause, according to the financial Press, Mr. Clore's personal fortune has risen from about £3 million to about £50 million. I wonder whether the Chancellor of the Exchequer can assure us that it will not rise further by more than 2½ per cent. in 1962.
The House will thus realise that I.C.I. is very far from being the only empire-building monopoly threatening the public. Nevertheless, of course, this proposed I.C.I.-Courtaulds merger would certainly confront us with a concentration of industrial power and wealth on a scale never known before in this country. Both firms, I need hardly say, are already amalgamations of a great many companies. Courtaulds has recently taken over British Celanese, British Enka and Pinchin Johnson, the paint firm.
If the combined merger took place it would have a capital of nearly £1,000 million and its labour force would be nearly 170,000 people, none of whom, incidentally, has apparently been consulted or even much considered in the whole operation. That figure of 170,000 is over 50 per cent. larger than the British Navy and is larger than the labour force of the electricity and gas industries put together.
If it goes through, this combine will also hold a near monopoly, not just in nylon, rayon, Terylene and the other man-made fibres, but will control a large part of our supplies of a number of fertilisers and chemicals, such as sulphuric acid, and of paint, dyestuffs and plastics. In addition, I would remind the President of the Board of Trade that there is a system of patents and licences which seriously limits competition in these products overseas as well as at home. Such a combine would have the power, if it wished, to close factories which dominate employment in a number of important areas, such as Tees-side, Pontypool and Flintshire.
In our opinion, quite apart from any economic or technical arguments, all this represents too great an agglomeration

of industrial power and wealth to be safely placed in the hands of a few men who are not limited by any effective system of public accountability. At the very least—hon. Members opposite would probably agree with this—the onus of proof is firmly on those who advocate the creation of private monopoly on this unprecedented scale.
Let me therefore examine I.C.I.'s case, which is not even accepted by Courtaulds. In so doing, I take no sides as between I.C.I. and Courtaulds. I do not think that any of us has enough information at present to do so. I start with no personal hostility against I.C.I., because during the war years and afterwards, when I worked in contact with that firm, I always thought that it showed considerable public spirit in quite a number of respects.
But we must ask: has Mr. Chambers made out his case by the test of public interest? In his latest manifesto, last Friday, Mr. Chambers argues that integration, which is greater size in effect, would yield economies in research, development, production and marketing. But greater size does not always make for greater efficiency. Neither A.E.I. nor G.E.C. are very good advertisements of that theory.

Sir C. Osborne: Nor is the coal trade, either.

Mr. Jay: I was coming to that.
The Government, with the help of Dr. Beeching, fresh from I.C.I., are engaged in breaking up both the British Transport Commission and the London County Council on the ground that this will improve efficiency. Are we to believe that a combine with a capital of about £200 million like Courtaulds or £800 million like I.C.I. is too small to be efficient even at present?
The House should note that there is no suggestion that the supposed economies can be achieved by larger scale production of fibres, by still larger plants. When I.C.I. and Courtaulds launched British Nylon Spinners, in 1945, they did not attempt to put the nylon spinning plants alongside the plant at Wilton, or any existing Courtaulds plants. They proposed a new plant at Banbury, and in the end settled for Pontypool. When they wanted to expand spinning capacity four or five years ago, they proposed


expansion, not at Pontypool, but at Portsmouth. In the end, they agreed on Gloucester. More recently, when they wanted to expand Terylene production, they did not propose putting the plant at Wilton alongside existing plants, but proposed to go elsewhere.
Mr. Chambers will, I am sure agree, that the economies are supposed to be achieved by centralising organisation, research and marketing. But would not a little competition in research be desirable, also? Here, experience is rather against Mr. Chambers' arguments. After all, Terylene was discovered, not by I.C.I. but by the despised textile industry, by Calico Printers——

Mr. H. Hynd: In Accrington.

Mr. Jay: Yes, in Accrington—in much smaller-scale competitive research.
Courtelle and Tricel, now admittedly by far the most successful fibres, were discovered and developed largely by Courtaulds in smaller scale research competing with I.C.I.'s main discovery, Ardil, was a complete commercial failure by its own admission. I.C.I. prefers to call it a commercial rather than a technical failure, but, at any rate, it came to an end.
The serious charge is made by Courtauld's, and, of course, denied by I.C.I., that I.C.I.'s real motive in the whole campaign is to ensure that the fibres produced in this country are not those which the consumer wants most, but rather those in which I.C.I. has invested the largest sums of money in producing the basic materials.
If I.C.I. is in this sense seeking to turn man-made fibres into a tied market, this whole merger would not merely be not in the public interest, but would be wholly against the public interest. It would be bad for our standard of living and for our exports, because other people in other countries would produce the fibres which the consumer wants.
I.C.I. does not seem to me in its many statements to have effectively answered that charge. I suspect that this remains the real point at issue in the furious battle now going on between the two firms. I.C.I. admits, incidentally, that a new American process for producing Acrilonitrile has heavily reduced the

price of the vital material for Courtelle. I.C.I. is now having to buy this from the United States at a lower price on Courtauld's behalf.
Is it true, as Courtauld's allege, that other materials monopolised by I.C.I. have risen by 50 or 60 per cent. in price over the last ten years of Tory freedom, while those in which competition appeared have suddenly come down? Is it true, as a noble Lord alleged in the debate in another place, that the price of caustic soda, for instance, was reduced by I.C.I. only when Courtaulds threatened to buy from abroad, and that the prices charged by I.C.I. for various other chemicals are much higher than those charged abroad, and have come down only after the threat of competition? A public inquiry would give Mr. Chambers an opportunity, which, he says, he would welcome, to answer these various questions.
As I have said before, however, Mr. Chambers and, indeed, Mr. Clore have introduced a new argument into this controversy. We are told that huge integrated concerns dominating the United Kingdom market are necessary to compete efficiently abroad. The Common Market is dragged in at this point to lend plausibility to the picture. Indeed, the President of the Board of Trade, in his statement on 30th January, rather incautiously lent himself to this doctrine, and so did the Prime Minister in some supplementary answers last week. Incidentally, neither of them mentioned the international patent agreements which considerably limit international as well as internal competition.
Have the President of the Board of Trade and the Prime Minister considered where this new argument leads? It certainly does not lead to free and flexible competitive enterprise. It would justify the formation of any private monopoly, however great and however much it dominated the British market. It would justify the amalgamation of all our great steel companies into one firm. Indeed, in the words of Courtaulds themselves,
The logical end to this process is a single group controlling half British industry.
Those are Courtauld's words, not mine. Is that what the Tory Party and the Government want?
I wonder whether Mr. Chambers has stopped to think where this argument leads. I.C.I. is about to build an oil refinery on the Tees in competition with Shell and B.P. Shell is producing petrochemicals and plastic materials at Merseyside, and B.P. is doing the same at Grangemouth and Llandarcy, in competition with I.C.I. Nearly 10 per cent. of Shell's profits now come from chemicals and not from oil.
Suppose that Shell came along one day and argued that all this wasteful competition and duplication should stop, and that a completely integrated combine should be established in the interests of efficient competition all over the world. Shell could use all the arguments used by Mr. Chambers in the last three weeks, including, in particular, his statement in last Friday's manifesto that the United Kingdom industry would be much stronger if it were united and able to present a full range of products and use common sites, services, management, and so on. What would Mr. Chambers do if Shell made a proposition of that kind? What, indeed, would the Government do? I presume that they would do nothing at all.
The Royal Dutch Shell Group would have little difficulty in making an overwhelming take-over bid for I.C.I. Mr. Chambers has just announced profits for 1961 of £62 million; but the Royal Dutch Shell Group's annual profit on a similar basis is over £300 million. There are plenty of clever people at Shell headquarters who could think up a convertible loan stock offer which would be quite irresistible to I.C.I. shareholders. Mr. Chambers should reflect on this as he looks out of the windows in Millbank, and sees the Shell tankers going up and down the river, and, indeed, even the Shell building further down, which is more than twice as high as his own. Cannibalism is emphatically not a game at which only one, or even only two, can play.
Therefore, it seems to us that the case is overwhelming, first, for a public inquiry into these mergers and, secondly, for a regular system of investigation in future before the rush towards private monopoly over so much of British industry goes any further. I am not saying that

I.C.I. has no technical case to examine—we do not have the information to make final judgment—but I do say, first, that the onus of proof is firmly on those who propose a private non-accountable concentration of power on this scale. Let us remember that in his Restrictive Practices Act the Minister of Aviation, whom I am glad to quote again, placed the onus of proof firmly on those seeking to make monopoly arrangements.
Secondly, the I.C.I. case has emphatically not been made out on the evidence as yet available to Parliament or the public. Even The Times today sums it up by saying that the risk of monopoly is substantial. Thirdly, the public interest is heavily involved at almost every point in the controversy. The Government tell up repeatedly that the public interest should be represented in wage negotiations. Is it the Government's doctrine that the public interest is involved if a small group of I.C.I. employees ask for another 2d. an hour, but that it is not involved if the Board of I.C.I. seeks to create the greatest private monopoly in our history?
Fourthly, in deciding this issue the interested parties should not be judges in their own cause. It is for this House and not for Mr. Chambers to say where the public interest lies. The Minister of Aviation, again quite rightly, on the Second Reading of his Bill in 1956, in referring to restrictive agreements said that
the parties to an agreement … are not the right people to judge whether the practice is or is not against the public interest."—[OFFICIAL REPORT, 6th March, 1956; Vol. 549, c. 1928.]
It was for that reason, at the right hon. Gentleman's request, that Parliament set up a court of law to give judgments on that point.
I cannot imagine a worse way for a great issue like this to be decided than by the Dutch auction of a take-over bid, which, in this case, is causing a lot of ill-feeling between the two companies, who are then to be expected to work together. Do hon. Members opposite really consider that the right decision is likely to emerge from a financial battle accompanied by leaks, rumours and investigations, soaring and dropping share values, charges and counter-charges, in which these two great companies accuse


one another of incompetence and misrepresentation, in which the 170,000 employees are barely consulted or considered, and the final decison, if things are left as they are, will be taken by one or two large shareholders of one company mainly on the basis of share values and medium-term capital gains? For that is what they are thinking about.
If the Government do nothing, neither the national interest, the efficiency of the industry, the future of exports nor the welfare of the staff will be a deciding factor. Therefore, it seems to us that the only way of reaching a rational decision in the public interest is through some form of public inquiry set up by the Government. And the only reason why the Government did not set it up, as everybody knows, is because Tory Ministers no more have the courage today than they ever had to oppose industrial interests of this scale and wealth.
One might have thought that the present Cabinet would have been particularly scrupulous where I.C.I. is concerned, because both Lord Chandos and Lord Amory joined the board of I.C.I. almost as soon as they left office. To his credit, the President of the Board of Trade wobbled in this direction for a week. Having told us, first before Christmas, that he did not agree that there was any public issue to be investigated, he proposed a week or two later to the Cabinet that there should be an inquiry, thus admitting our case. But when the Cabinet took fright and turned his proposal down, he capitulated; and after four or five days of further thought he made one of the most pathetic ministerial statements I have ever heard made in the House.
The right hon. Gentleman told us, as his excuse for doing nothing, that the effects of the merger could only be "judged by results". He went on to say that if the merger occurred, and if it operated against the public interest he would refer it to the Monopolies Commission, and if, after its report, new powers seemed necessary, he would ask Parliament for them. I assure the right hon. Gentleman that after his performance over the Imperial Tobacco Company, this assurance does not impress us or anybody else in the least.
Finally, the right hon. Gentleman told us in his statement ten days ago that nobody, however expert, can possibly peer into the future and investigate hypothetical circumstances. Therefore, what the Government propose is to let the merger go through, whether it is nationally desirable or not, and then, if necessary, unscramble the omelette after it has been cooked. Of all the possible policies that a Government could follow, that seems to me the most farcical, the most irresponsible and the most harmful. It is not even fair to I.C.I. or Courtaulds. Let the House imagine the consequences, human, industrial and economic, of integrating the vast organisations of Courtaulds and I.C.I. into a single body and disintegrating them again three or four years later.
If the right hon. Gentleman cannot see the sheer absurdity of this for himself, would he not consider the array of opinion against him on this issue? Not only do many hon, Members opposite, to judge from Question Time the other day, support the demand for an inquiry, but a very large selection of the Conservative and financial Press does the same. Even Mr. Harold Wincott of the Investor's Chronicle, an enthusiastic and almost passionate believer in private enterprise, argued most forcibly for an inquiry in that paper on 26th January. The Financial Times said that the right hon. Gentleman's excuses for inaction were unconvincing, and The Times today comes out heavily against him. Ministers know quite well that whatever the legal powers—and this point was made by Lord Swinton in another place—I.C.I. would be ready to hold its hand for a time, if the Government asked it to do so.
As to the argument of the President of the Board of Trade that nobody can look into the future and estimate the effect of a merger before it happens, what does he think the boards of I.C.I. and Courtaulds have been doing during the last few months? If the Government do nothing, the issue will not be undecided. It will be decided by investment experts taking views about the future, and taking them for the wrong reasons. As to the right hon. Gentleman's belief that nobody outside the firms concerned is expert enough to give


judgment, what does he think the Restrictive Practices Court and the Monopolies Commission have been doing all these years? The Monopolies Commission conducted an inquiry into the fertiliser business of I.C.I., and it is perfectly possible for impartial and experienced people, whether in the case of a monopoly or a price agreement or a merger, to hear expert evidence and give a verdict in the public interest.
Incidentally, does the right hon. Gentleman not know that this is substantially the system in the United States where, under Section 7 of the Clayton Act, the Federal Trade Commission has exactly this power to intervene and stop a merger before it goes through? The interesting thing is that this very amendment was made to the original Sherman Act precisely because Congress thought it absurd that mergers should be allowed to go through and then be broken up afterwards.
We therefore believe not merely that the case for an inquiry into this merger is unanswerable, but that the time has come to give a standing public authority, possibly a reinforced Monopolies Commission, the job of looking into major mergers and doing it quickly before they go through. It is not good sense to have a Restrictive Practices Court, which the right hon. Gentleman set up, judging restrictive agreements, and the Monopolies Commission judging monopolies, and then having mergers Which may create monopolies going through completely un investigated—particularly as some mergers, such as the merger of Courtaulds and British Celanese, have as one of their main objects, quite naturally, to get round the restrictive practices legislation.
In our view one essential justification of private enterprise, if we are to have it, is competition; and if competition is to be suppressed, some other sanction for public accountability must be put in its place. I say frankly that if this merger goes through, or a proper inquiry is held and unification is judged to be technically necessary—as happened with coal, gas and electricity—then effective public control, if necessary by public ownership, would have to be established over the giant monopoly thus created.
The Prime Minister himself made a striking contribution to this controversy last week, when he said at Question Time that on this issue he did not retreat from what he wrote before the war. I have therefore looked up what he wrote about this. What he said in "The Middle Way" was:
Certain industries and services which are of key importance to the vigorous life of the community, and which have reached a stage of development, where their conduct requires to be governed by wider social considerations than the profit-making incentive alone, should be brought under either some suitable form of public ownership and management; or in certain cases a form of statutory control or supervision which may not involve public ownership.
These were wise words, if rather long ones. How much more progressive the Prime Minister was twenty-five years ago than he is in 1962. How glaringly these wise and brave words contrast with the total cowardice and inaction of the Government today which I ask the House to condemn this afternoon.

4.40 p.m.

The President of the Board of Trade (Mr. F. J. Erroll): The right hon. Member for Battersea, North (Mr. Jay) said that he had never heard such a timid or futile statement as the one I made to the House a short while ago. I would like to return the compliment by saying that I have been waiting for sixteen years for him to make a good speech and that I am glad to say that I heard it this afternoon. I listened with great interest to the way in which he deployed his arguments. I will do my best to answer them and, at the same time, to put forward the Government's point of view, because there is nothing complacent or timid about the policy of Her Majesty's Government towards mergers or monopolies.
I want to spend a minute or two in explaining this policy, because the House will then be better able to see why we reached the decision which I announced to the House on 30th January concerning the I.C.I. and Courtaulds merger proposal.
On this side of the House, we believe that it is in the public interest to have a free enterprise economy for this country. If our economy is to be as efficient as possible, and thus render the best possible service to the public, the units, whether large or small, must be free to grow or to contract, to merge or to


separate, as changing circumstances may dictate.
For many years now, indeed going back to before the beginning of this century, mergers between equals have taken place and small companies have been taken over by bigger ones. This natural evolution has been for the good of the public and for the good of the industrial and commercial development of Britain. We all take for granted, for instance, the joint stock banks—the Big Five—but they came about as a result of mergers and the taking over of small banks, many of them one branch banks in small towns. No one would want to go back to the old system now.

Mr. Jay: The right hon. Gentleman should also remember that, in the 1920s, there were proposals for further mergers of banks, and that it was only because the Government of the day stepped in and asked the banks not to proceed that the process did not go further.

Mr. Erroll: I am coming to the question of further amalgamations later in my speech.
During the inter-war period we took for granted the four main line railway companies which were themselves the result of mergers and amalgamations between privately owned railway companies, a process which had been going on for many years. There have been similar striking examples of growth in industries. Unilever's grew from a single grocer's shop in Bolton and the two companies which are partly the subject of to-day's debate, I.C.I. and Courtaulds, have each reached their present size as the result of take-overs or association with other companies.
Just two years ago, the Government made an announcement about mergers in the aircraft industry, and I remind right hon. and hon. Gentlemen opposite that the Opposition spokesman on that occasion welcomed those mergers. At the same time—and this is an important part of my general theme—such is the virility and variety of our present system that there are always new companies being formed and new factories starting up to enrich and enliven the economy. Some of these may grow on their own, others may merge with their competitors, and so the process continues.
For those of us who believe in private enterprise, this is how the system should work, and we believe that this is the best way of enriching the nation and raising the standard of living. I know that convinced Socialists may have other views, but I am glad to be supported by the right hon. Member for Battersea, North in this important matter, because in the new book which he has just published, "Socialism in the New Society"—the author, one Douglas Jay, who is, I presume, the right hon. Member—says, on page 340:
Some are even devoted to the idea of starting a small business of their own, running a shop, a garage, a farm or a one-man lorry enterprise. And of these some end up like Lord Marks, Lord Nuffield, or Mr. Isaac Wolfson with a creative lifetime behind them. It would certainly be a foolish doctrinaire constriction of human freedom to deny such individuals … the right to exercise their talents and inclinations. … In a free society let us value freedom in all its creative or harmless forms.
In the world in which we live—and this is what we must remember in considering the words which the right hon. Gentleman has written so eloquently in his book—there is a trend, common to all industrially developed countries, towards an increase in the size of companies. There are a number of reasons for this. It may stem from the development of new productive techniques, which broadly result in better and cheaper goods to the consumer, but which cannot, in the main, be carried on without the expenditure of large sums of money on buildings, plant and machinery. In addition, the intensive research which is nowadays required in nearly all branches of industry in order to keep abreast of competition, and to forge ahead with new products, often simply cannot be paid for except by companies with substantial capital resources.
This world-wide trend towards larger companies—which is probably one of the reasons underlying the present merger proposals—is one of the facts of life in this century and is not necessarily a bad thing.

Mr. Walter Monslow: Is not the right hon. Gentleman revealing a strange paradox, in that the Government are pursuing a policy of decentralisation in the transport industry?

Mr. Erroll: I did make the point that, in certain circumstances, it would be better to break up rather than to concentrate further.
The process of growth to which I referred can lead to a possible danger. A company can become so strong that it exercises a dominant position in the market, or has become, for all practical purposes, a complete monopoly. So placed, a company could operate against the public interest, but it would not necessarily do so. This was clearly brought out in the Coalition Government's 1944 White Paper on Employment Policy, paragraph 54 of which stated that
Restrictive agreements or combines do not necessarily operate against the public interest, but the power to do so is there.
That was what the Government White Paper said. There is also this view:
It has been agreed between all schools of thought and political parties since 1945 that neither monopolies nor restrictive practices can be judged as good or bad as such; but that the advantages and disadvantages must be weighed on certain criteria in each instance.

Hon. Members: The right hon. Gentleman is reading.

Mr. Erroll: Yes, I am reading. I am quoting what the right hon. Member for Battersea, North said in an article on monopolies in this month's issue of The Times Review of Industry. He himself accepted the approach which hitherto has been common ground between the Government and the Opposition of the day since the war ended. If he stands by the article, as I am sure he does, he will agree that the proposition still holds good, and that, basically, all post-war Government policy on monopolies has derived from this simple proposition.
The policy has been, and remains, that a sensible judgment cannot be reached in a particular case without a full examination of what I might call "the surrounding circumstances". I shall mention some of these. They are many and varied. For instance, one would have to examine how the monopoly came about—whether it had been achieved simply by beating a competitor on price, by making a markedly superior product, or by being first and alone in the field with an entirely new product.
Then one would need to examine whether the monopoly had been brought about by merger or combination with competitors, or by using market or financial power to drive out competitors. One must also look at a factor which is most important. This is the economic and technological context in which the monopoly operates—the state of international competition, whether the industry is expanding or declining, how it operates on matters of research and developments, and the way it handles new ideas, including patents.

Mr. Austen Albu: Has the right hon. Gentleman made such an inquiry in the case of the current negotiations?

Mr. Erroll: I am coming to that a little later.[HON. MEMBERS: "Tell us now."] I am glad that hon. Members are showing a slight degree of impatience, because it shows that at least I am holding their attention.
All these matters, and a number of others besides, need to be fully examined, because it would be harmful to the future development of the economy to condemn a monopoly unless one had a clear knowledge of its defects and what structure ought to be developed instead. This was the philosophy behind the 1948 Monopolies Act which the Labour Government introduced and which was supported by the Conservative Opposition of the day. Sometimes the Commission set up under that Act has given entirely favourable recommendations regarding monopolies reported to it. But when the investigations of the Monopolies Commission have revealed to the satisfaction of the Government the need for remedial action then we have taken the necessary action.
The Act has, in fact, worked well. The Act, however did not confer on the Government broad powers to implement every single recommendation whatsoever it might be, because it was clear that action to be taken would depend inevitably on the circumstances of the case. Many of the recommendations have been implemented by discussion with the firm or firms concerned, and had we been unable to get satisfaction in this way we should not have hesitated to ask Parliament for any additional


powers which might be needed. While, in general, we have accepted a large proportion of the recommendations of the Monopolies Commission, it would be wrong to suggest that the Government are bound to accept all the recommendations and to implement them.
I will deal with Imperial Tobacco and Gallaher's in a moment. It was said by some people that my action there was creating a precedent, but that is not the case. We did not implement all the recommendations in the case of British Oxygen, and there were several earlier cases in which the recommendations were not implemented in full. I should like to say this:
It does not follow … that the Government should make an order in every case, or even that they must accept the Commission's recommendations in every case. The Government must have the final responsibility. They have to consider the recommendations, discuss them with the interests concerned—including the consumers of the product in question—and weigh the recommendations against the general test of public interest."—[OFFICIAL REPORT, 24th February, 1955, Vol. 537, c. 1475.]
I am reading again, this time from the OFFICIAL REPORT Of the speech of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) in the debate on 24th February, 1955, when monopolies were being discussed. So it is interesting to see that even on this matter there is common ground between us as well.
I now want to turn to the Imperial Tobacco-Gallaher issue, because the right hon. Gentleman raised it specifically, and I should like to deal, first, with the charges he made of cowardice on my part. I do not think that anybody seriously accuses me of being afraid of the House of Commons, or of being cowardly. I think the right hon. Gentleman was using those words in their rhetorical sense.
The right hon. Gentleman asked me about the timetable. Of course, the timetable may be a long one. It usually is in the case of a Monopolies Commission Report. The Report was signed in January, 1961, and then time was spent in considering whether or not to make any excisions under the terms of the Act, and in proof reading and printing. It was finally published in July, 1961, and then it took a long time, partly because of summer holidays, for us to approach the retailers and others

who necessarily had to be invited to submit comments. Those comments came in by October, 1961.

Mr. Jay: Can the right hon. Gentleman say at what date it was in his hands?

Mr. Erroll: I have given the date. It was 6th January that it was signed, and then the discussions took place with the bodies concerned about any possible excisions which they had a right to request under the terms of the Act.

Mr. Jay: The right hon. Gentleman had it in January?

Mr. Erroll: Yes, certainly, but we could not have discussions with the retailers until the Report had been published, and the retailers were entitled to have their say, and for all practical purposes there was very little that we could do about studying the recommendations in the Report until after publication and until after we had received the comments of the retailers. We received those in October, 1961, and on 28th December the Press notice gave details of my decision.
I should like to explain to the House that I would have preferred to have followed the usual procedure which is, of course, to give the decision in a Written Answer in HANSARD. The practice has not been to give an Answer by means of an oral Question and Answer. By publishing it as a Written Answer Members of Parliament and the Press get the Answer and have some time to digest it and hon. Members are in a better position to put oral Questions subsequently. I did my very best to get all the details through before the House rose, but this was an important matter and I had to get the wording of Imperial Tobacco's undertaking agreed precisely with them, and it simply was not physically possible to get it ready just before the House rose on 21st December. Then there arose the question of whether to keep it on ice for a further four and a half weeks when I had already been criticised for having sat on it for so long. I knew that if I published it by way of a Press announcement I should be criticised. I took that into account, but it was more important to get it published quickly. It was not a question of cowardice. It was simply a question of not being able


to get all the details finally until just before the House rose and I thought, having regard to what had been said to me on 21st December, that I should publish it as soon as I could and that that was the best course.

Mr. James Callaghan: Does not the right hon. Gentleman think that, having had the Report in his hands since 6th January, this shows singularly bad management in his Department and by him—that there could not be a final conclusion by one week sooner in a total period of consideration of eleven months?

Mr. Erroll: That, of course, is an easy criticism to make. I do not want to go on into the detail of the timetable. The answer is that the first months are spent not in detailed consideration by the Department but on the other things I have outlined and the essential part of the consideration cannot take place until we have received the comments of the retailers.
The Report had to be printed. If we could get the printing industry to act a little quicker, then we should get these reports a bit quicker. Hon. and right hon. Gentlemen opposite may help us in that regard. However, six months were spent in getting the document ready for publication.
As regards the decisions, the Commission found that Imperial Tobacco's monopoly position does not operate against the public interest; nor may it be expected to do so.
The Commission made two recommendations, one of which I accepted—the one, namely, about display bonuses; and the company agreed to abandon them. The second recommendation was the one that the Commission found that retention by Imperial Tobacco of its Gallaher's shareholding was, to quote the Commission's phraseology, "a thing done" by Imperial Tobacco for the purpose of preserving its monopoly position. The Commission considered that this operates and might be expected to operate against the public interest, but it admitted that Imperial Tobacco had not so misused its shareholdings. It made the recommendation in order, to quote the Commission,
to eliminate the risk that competition between Imperial and Gallaher might be inhibited by the existence of a financial link between them.

In all this I rather think the Commission was looking at what might happen rather than at what may be expected to happen. There is no inhibition of competition, which is an important matter in this field. By all accounts competition has become more severe. Certainly the sales of Imperial Tobacco's principal competitors, including Gallaher, 'have been increasing; not only Gallaher's, but others have been increasing as well.
The extent of the Imperial Tobacco's shareholding in Gallaher was not publicly known until the Commission reported. The Commission acknowledged that Imperial Tobacco had not used its shareholding to intervene in any way in the management of Gallaher. Imperial has now publicly reaffirmed this assurance as regards the future and given a formal undertaking to the Government. The effective power of this shareholding has thus been effectively neutralised and there is no need to insist on Imperial Tobacco divesting itself of this shareholding which is a dormant one now, as indeed it has been all along, as the Commission itself recognised, and should Imperial Tobacco renounce its assurance and start intervening in the management of Gallaher the Government, of course, can take any further steps which they may consider necessary. In this way I have been able to achieve the object of the recommendation without insisting upon the disruption which would have been caused by the sale or disposal of Imperial's shareholding in Gallaher. There is nothing cowardly in that.

Mr. John Diamond: How does the right hon. Gentleman know at a distance that such interference in the management is not already taking place?

Mr. Erroll: It has certainly not been taking place in the past because the Commission said it had not been. Imperial has always said it would not use its shareholding in this way, and, in fact, if this were to take place it is perfectly open to the board of Gallaher's to take the necessary steps.

Mr. Jay: What in this case does the right hon. Gentleman think desirable


about Imperial Tobacco continuing to retain its shareholding?

Mr. Erroll: That is for it to decide. It is quite clear, and everybody knows, why it originally acquired it. It was in the 1930s, in order to prevent the acquisition of Gallaher by an American company. Imperial has gone on holding those shares and would probably now say that while the original purpose of acquiring them was no longer appropriate, to try to sell off a large shareholding could result in substantial losses and not be a very convenient market operation. However, it is for Imperial Tobacco to decide how to handle its investments. It is for us to make sure that its having this investment does not result in a diminution of competition, and I have managed to secure that end without harming the company.
The policy of the Government on monopolies, which has hitherto been broadly accepted by political and public opinion generally, is that one cannot reach conclusions about the effects on the public interest of a particular monopoly, still less of a proposed merger which would lead to monopoly, on abstract theoretical grounds. We must first make a full examination of all the surrounding circumstances, including the observed effects, before deciding whether some form of intervention is required.
In effect, that means that the Government's attitude towards a monopoly is mainly conditioned by its performance in practice. Hon. Members may argue that that is too late, but that view is tenable only if one assumes that all monopolies are, merely by reason of their existence, dangerous and harmful, and we on this side of the House do not take that view.
Nevertheless, where we have found general practices of a nature contrary to the public interest, we have not hesitated to take the necessary steps, as was shown by our passing the Restrictive Practices Act, 1956, which authorised the setting up of the Restrictive Practices Court. This action was taken as a result of the Commission's own Report on Collective Discrimination. Although, as I well remember, the Opposition at the time did not think very much of this proposal, I think that today everyone would agree that the Restrictive Practices Court has been most effective.
It is against this background, a largely agreed background, that I want to discuss the I.C.I.-Courtaulds merger proposals. I should like to explain to the House that for a considerable time I.C.I. and Courtaulds had been discussing possible arrangements for a closer association. Courtaulds itself said in its notes to the Press on 17th January that
there are structural weaknesses in the industry which must be eliminated one way or another.
I am not here concerned with the nature of these earlier discussions. The public became aware of what was going on only on 18th December, when I.C.I. announced that it had proposed a merger to the directors of Courtaulds. The directors of the latter company announced that they were consulting their financial advisers, but by 5th January they announced that they were unable to recommend their shareholders to accept the offer. I must give this timetable because it is important to the purpose of my argument.
Further proposals were then discussed, but by 17th January Courtaulds announced that discussions had been concluded without finding proposals acceptable to both parties. I mention these dates and happenings to show to those who would have had the Government intervene earlier—and the right hon. Member for Battersea, North is one—that it would have been completely wrong for the Government to have taken any steps at that stage. Here were proposals which were being passed between the boards of the two companies and they finally called everything off on 17th January. They might then have left things as they were—in other words, no change. That is how the situation might have remained.
Instead, however, I.C.I. announced that it was going to improve its offer and on 18th January Courtaulds said that it was advising its shareholders to reject the revised offer. This meant that the Board of I.C.I. was going to appeal to the shareholders over the heads of the directors of Courtaulds and against the latters' judgment.
This development created a new situation and with the announcement of the news on 18th January there emerged a demand for a public inquiry. Here was the largest take-over bid ever, and the public, or certain sections of it at any


rate, felt that something should be done. The question for the Government was really whether the circumstances of this take-over were so exceptional as to justify a change in the well-established and fully understood policy. In particular, did the sheer size of the operation call for some special intervention by Her Majesty's Government?
When I announced the Government's decision twelve days later, I was accused by the right hon. Member for Battersea, North of repeated changes of mind which revealed confusion, vacillation and cowardice. I hope that he will have some new adjectives for me when we next have a debate. Only a few questions later, the same afternoon, the right hon. Gentleman the Leader of the Opposition nevertheless asked me:
Cannot the right hon. Gentleman reconsider this matter …?" [OFFICIAL REPORT, 30th January, 1962; Vol. 652, c. 902.]
So, if I had gone an considering the matter, as the Leader of the Opposition requested, I should have seemed to the right hon. Member for Battersea, North to be still more vacillating and cowardly. Perhaps he will consult his right hon. Friend the Leader of the Opposition about deciding what I ought to be doing.
The fact is that the size of this operation and the understandable, though generally vague, feeling of public unease in the matter fully justified the Government in considering urgently but carefully the issues involved. As the House will know, I asked the chairmen of the two companies to come to see me separately on two occasions, and I received a full explanation of their views. Both companies also published a good deal of additional information.[Interruption.] Information looked at from their respective points of view, perhaps.
After this examination of the issues, the Government made a positive decision—and I want to underline this—to reaffirm their existing policy concerning mergers and monopolies. I announced this decision, rejecting the proposed public inquiry, only twelve days after the announcement of the take-over bid proper. I cannot see how this can in any way be represented as weakness or vacillation. It was surely right for the Government to take into account the

views of the Opposition and of certain sections of public opinoin and to announce their decision unequivocally and as soon as possible, and this is what we did.

Mr. Callaghan: Did the right hon. Gentleman himself put a proposition to the Cabinet that there should be an inquiry?

Mr. Erroll: The Opposition Front Bench know perfectly well that Ministers never indicate what they may or may not have said in the Cabinet.
The right hon. Member for Battersea, North referred to shareholders and queried whether they should decide this great issue. He made the point that in a matter of this importance it was wrong that the issues should be settled in effect by the selfish decisions of individual shareholders, whether large or small.
To put the matter in that light is to distort what is really happening, but even if that is true I cannot accept that collective decisions of many thousands of shareholders, who between them represent a cross-section of the community, will be necessarily less reliable than the views about the probable future course of events which a collection of experts, or the Government for that matter, might reach. The shareholders at least have as much interest as anyone else in the long-term prosperity and success of the industry in which they have a stake. I cannot believe that they will judge this matter entirely on the basis of short-term calculations of the immediate financial return to them of a decision one way or the other.

Mr. Jay: I have no objection to Courtaulds shareholders being consulted, but is the right hon. Gentleman aware that none of the employees of either company has been consulted, and that, in effect, I.C.I.'s quarter of a million shareholders have not been consulted.

Mr. Erroll: Shareholders, whether employee shareholders or others, will have their opportunities. As regards employees as a whole, both companies have very good records as employers.

Mr. Philip Noel-Baker: Many thousands of my constituents are involved in this question. The right hon. Gentleman justifies not having


an inquiry on the ground that the companies are good employers. Has he consulted the staffs concerned about what they think of this matter, which is vital to their future?

Mr. Erroll: I am coming to the detailed grounds for rejecting the idea of a public inquiry, but I do not intend before doing so to get involved in what I might call the technical and scientific pros and cons of this argument, which the right hon. Gentleman touched on and which may well be referred to later in the debate. To put it colloquially, I certainly do not intend to be led up the garden path of the acrylo-nitriles.
I can sympathise with those who feel that there was something to be said for a public inquiry. If one is uncertain about a situation, or uncertain about how it might develop, the natural thing to do is to ask for an inquiry. I, therefore, feel that I owe it to the House to show why such an inquiry would have been inappropriate.
First, there was no difference in nature between this take-over proposal and many others, although there was a difference in size. If we were to have a public inquiry on this occasion, would that mean that we should have to have other public inquiries on other occasions in the future? And if so, on which occasions?
Hon. Members may have noticed—and I think that the right hon. Gentleman referred to it—that a number of other merger proposals were being announced at about the same time. These included the merger of privately-owned airlines, the merger of two already large brewery groups, the take-over of a bottle manufacturing plant by United Glass Ltd., the merger of Consolidated Zinc with Rio Tinto, and the take-over of Measham Motor Sales by Southern Counties Motor Auctions. This last merger, although small, results in the creation of a virtual monopoly in the public auctioning of second-hand motor vehicles.
I mention that list to show that this is a process which is going on all the time, but all these passed without general public comment, and without comment from hon. Gentlemen opposite. The one which did attract their

attention—apart from this case—namely, Mr. Clore's British Shoe Corporation, will not be a monopoly even after it has taken place. It attracted the attention of hon. Gentlemen because of the name of Mr. Clore. They did not bother to get the facts.

Mr. A. E. Cooper: At the same time as these negotiations were going on, the London Co-operative Society was negotiating to take over Bearmans, Ltd., of Leytonstone.

Mr. Erroll: When it comes to monopolistic concerns, the Co-operative Society takes a lot of beating. I did not hear the right hon. Gentleman refer to this organisation.
To deal with the British Shoe Corporation, the new group is likely to control less than 8 per cent. of all production of footwear in the United Kingdom, 12 per cent. of retail outlets, and perhaps 22 per cent. of retail sales, so it will not qualify under any heading of the Monopolies Act. The right hon. Gentleman referred to what I might call the Clore empire. Size in itself is not harmful, and certainly the Clore empire is not as big as the Co-operative Wholesale Society.
I should like to remind the House of the merges proposals I mentioned, because is it to be suggested that all these should be the subject of public inquiries? I suspect that there are those who say they should, but if we are to have public inquiries into merger proposals, it must be clearly laid down in advance what type of proposal will attract a public inquiry, and what will not. Without proper criteria the business and industrial world will not know whether it is likely to be subjected to a public inquiry in the event of making a merger proposal or not.

Mr. Callaghan: Would the right hon. Gentleman accept that?

Mr. Erroll: I am coming to that.
That leads me to the second important objection to a public inquiry in the case of I.C.I.-Courtaulds, and that is the delay which such an inquiry would cause. A hurried inquiry, taking only two or three weeks, could only be superficial and probably unfair to all the interests concerned, including the public interest. A detailed inquiry which sets out to


analyse the technical and economic considerations involved would occupy a number of months, as the Monopolies Commission has always found and been unable to speed up. Further time would be spent before a view could be formed, and this would still be no more than a view about probabilities. Such a procedure would lead to a great deal of uncertainty, which would encourage speculation and damage the interests of the two companies and their respective shareholders.
I should like to deal now with what I call the mechanics of such an inquiry. The right hon. Gentleman referred to a public inquiry, but I suggest that what he meant was an independent inquiry rather than an inquiry held in public. This point was never made clear, but it is important. There would, nevertheless, be difficulties about an independent inquiry even if held in private, but the difficulties would be greater still if the inquiry was held in public. These are practical matters which I should like the House to consider before opting too readily for the concept of public inquiries before mergers take place. It would be unreasonable to expect companies to disclose confidential information, and even if they did one could not be certain that they were disclosing the full confidential position and not just the part which they thought would favour their own points of view.
The inquirers would obtain certain information relating to the past and present, but it would not be evidence; nor would it necessarily be the whole story. It may be suggested that the inquiry be given powers under the Tribunals of Inquiry (Evidence) Act, 1921, which enables tribunals to take evidence on oath and to require the production of documents, but judicial inquiries of this kind are designed to establish the facts, for example, in cases where there are allegations of improper disclosure of confidential information. Such an inquiry would be quite unsuitable on a matter which involves not only facts about past events, but guesses or forecasts about developments which may, or may not, take place in the future. This is a very real reason why a public inquiry would be useless in the present circumstances.
The question is whether a merged I.C.I. and Courtaulds would produce and develop man-made fibres more efficiently and sell them more competitively than the two separate firms, or not. The answer to this question depends on technical, commercial, and management considerations which cannot be foretold or evaluated in advance of their happening.
Clearly, therefore, there is no body of experts who could do more than express an opinion—and it might be several conflicting opinions—on what is, after all, the real heart of the matter. I do not wish to appear flippant, as I mean it quite seriously. The experts would have to have a clairvoyant sense if a public inquiry of the character suggested was to be of true value.
I understand that there may be anxieties about the possible dangers of this merger, but surely it is right to remember that there may be equal or even greater advantages, and both disadvantages and advantages are matters for speculation.
For all those reasons, I believe that the Government are right to adhere to the established policy regarding mergers and not to make a change which might create awkward and undesirable precedents simply because this take-over bid is larger than any other so far.

Mrs. Eirene White: Will the right hon. Gentleman say a word about Shell? Is he considering this purely as a matter of kind or also of degree? If Shell proposed to take over I.C.I. would his argument apply equally to that?

Mr. Erroll: I am not going to pronounce on the details of this proposed merger, which we know is in the offing, so I will not comment on a merger which has not even been proposed.
I realise that the I.C.I.-Courtaulds merger proposal has brought into prominence a more general issue to which the Government are already paying attention. Perhaps I might put it this way. Mergers and re-grouping have been tolerable so far in our industrial development, but are they now not perhaps going too far? It is right, let us say, to have the Big Five joint stock banks, but would it be right if they were all to merge into one? It may be


right to have brewery mergers, but do we want to see the process going so far that we end with one brewery monopoly, even though that monopoly would have to compete with imported beers and the wine and spirit trade?
This is a matter which the Government were already studying before the I.C.I.-Courtaulds merger proposal was made public on 18th December. I had already decided last year that as five years had passed since the 1956 Act the time had come to put in hand in my Department a comprehensive review of our monopolies and restrictive practices policy. This review will cover all aspects of the matter and will provide a basis on which the Government can reach conclusions about the need for, and the scope of, any amending legislation on the subject.
The review is making good progress, but the subject is complex, and I doubt whether the results will be ready before the end of the year. It has reached the stage when it would be helpful to have from industry and from other interests concerned statements of their view on any subjects covered by it. I therefore intend to publish very shortly an invitation to interested parties to submit written statements of their views to the Board of Trade. I hope very much that bodies representing trade, both sides of industry, consumers and other interests, will take advantage of this invitation.
From what I have said, I am sure that the House will see that there is nothing timid or complacent about the policy of the Government in this important field of our economic development. Furthermore, we are being consistent in the application of a policy which up till now has been largely agreed between the two sides of the House. We are being consistent, we are being firm and we are being forward-looking. I, therefore, ask the House to reject the Motion.

5.20 p.m.

Mrs. Eirene White: I have to declare an interest in this matter, namely, a very strong constituency interest in anything which may affect the future of Courtaulds. I have no fewer than four of its factories in my constituency, employing some thousands of workers whose future may be very considerably affected by this proposed

take-over by I.C.I. I have no personal financial interest in either company. I had a very modest holding in I.C.I.—a handful of shares—which were sold last March on the advice of the gentleman who looks after my modest savings because he did not think that there was any prospect of growth in the next few years. My shareholding was really so minute that I do not think it would have affected my interest one way or the other.
I will deal briefly with the constituency aspect before turning to the much wider matters involved. I must say that I am most deeply concerned at the future prospects for employment in my area after having read the account by I.C.I. of its view of the manufacture of rayon. If one looks at the documents circulated by I.C.I., it appears that all it is interested in concerning man-made fibres are the more expensive ones and that it really brushes on one side, as something of no consequence at all, the rayon industry.
The company says that Du Ponts, in America, has abandoned rayon production as unremunerative, and its whole reference to rayon is extremely slighting. But as the The Times leading article pointed out this morning, cheapness and large quantity are not in themselves a vice in manufacture. If one really carried out the suggestion of I.C.I., that one needs integrated high-cost production, then one should really start a "Keep your own silkworm" campaign. I should have thought that the company might have thought about going into that.
It seems to me to be of great importance that we should not simply put on one side the whole of the rayon production of his country, which is a cheap and simple fibre to produce and which has many uses—not the same uses as the more expensive synthetic fibres—for cheap clothing, linings, and so forth. I can only say, having read the I.C.I. report, that I am alarmed for the future prospect of employment in my constituency. I cannot see any one of our four factories having a long life if this proposed merger goes through, and this is in an area in which there is virtually no alternative employment for the people concerned.
Of course, although I take this very keen interest in what may possibly happen to my constituents, as is natural enough, my interest in this whole problem of mergers goes very much wider than that, more particularly when the merger is not merely a coming together of two interests but one which will result in a monopoly. It is not merely a matter of size; there is an element of monopoly in this which has caused much public concern.
The President of the Board of Trade mentioned various other recent, or proposed, mergers and said that there had not been so much public concern about them. But in most instances they did not involve both the vast number of work people as in this case and, also, a monopoly in products which are in common use. A monopoly may not be misused, but, of course, it is a standing temptation to those in a monopoly position to take advantage of it. Therefore, from the point of view of the consumers as well as of the workers—I will speak about the workers in a moment—what guarantee have we in a monopoly situation that such a large enterprise will not abuse its position?
It may not, perhaps, abuse it very markedly so as to draw the attention of the Monopolies Commission, but it could all the time, in small ways here and there, very well be charging higher prices than would be the case if there were genuine competition. All I can say is that my confidence in what may happen is not strengthened from what has already been the experience of I.C.I. Whatever may have been the state of affairs during the war, I would draw attention to the fact that twice within the last three years I.C.I. has been the subject of a note by the Comptroller and Auditor General concerning prices charged for goods supplied to the public services. That is something of which the company has no reason to be proud.
I have here the two notes by the Comptroller and Auditor General in the two instances which I have happened to find. There may have been others of which I am not aware. I am not a member of the Public Accounts Committee and I do not pretend that there may not be other instances in addition. But here are the two. The Atomic Energy Authority was placed in a position of

having to buy from I.C.I. a particular chemical of which the company was the sole supplier. The Comptroller and Auditor General found that the financial terms for this were such that the Atomic Energy Authority had to amortise the whole cost of the plant and buildings required for the manufacture of the chemical for five years and, in addition, pay 12½ per cent. profit to I.C.I. for the whole transaction. In other words, as the Comptroller and Auditor General pointed out, in the first year the percentage was 17 per cent. on the capital employed increasing to 45 per cent. in the fifth year.
Today, I have had a Written Answer from the Minister of Health to a Question which I asked him about the supply of an anæsthetic. Again, I.C.I. is the sole supplier to the hospital service. The Comptroller and Auditor General had noted that the cost of this anesthetic seemed to be unduly high. A regional hospital board had tried to obtain better terms and failed. The reply which I received today says that after, but not before, public attention had been drawn to this matter by the Comptroller and Auditor General the price is to be reduced by 10 per cent. as from 1st February, 1962.
All I am suggesting is that where there is a monopoly there is a constant temptation and that, therefore, we are right to say that where we have a monopoly situation the public interest is concerned. This is a real monopoly, not just 30 per cent.; in man-made fibres it will be 90 per cent. At present, we are protected by tariffs against foreign competition. I will come to the Common Market shortly, but the basis of the decision taken by the right hon. Gentleman is that we are not yet in the Common Market. This tariff protection means that in commodities of general public consumption we have nearly a 100 per cent. monopoly.
The right hon. Gentleman said that we had welcomed the aircraft consortia, but at least there are two competing consortia, and, as the chief buyer, the Government have a considerable influence upon what happens in such circumstances. That was a particularly inept analogy. The right hon. Gentleman said, "Of course, we should not prevent the growth of new companies." I should


like to know what new companies will have much chance of entering this field, or the newspaper and magazine field. We are absolutely right to raise this matter.
I now want to say a word about the prospects of the people employed in these organisations. One of the great arguments against monopoly is that it provides a single employer. This does not matter, except from the local point of view, to the operatives, but it matters intensely to the research workers. One of the great arguments about broadcasting was that we should have another service for people whose creative talents were not being fully used, possibly fox personal or temperamental reasons, by the B.B.C.
Similarly, if our research workers in certain industries have to depend upon single employers I cannot believe that it will be in the public interest. It may be said, "If we go into the Common Market those people can shop around and find other employment." That means moving their families, and involves questions of education, and so forth, and I do not think that we are yet such good Europeans, or are likely to be so, for a generation or two to come.
This is a serious objection to monopoly in an industry of this kind, where research in the manufacture of manmade fibres has such a great effect in changing and developing the industry. Unless we have good outlets for our research workers, and give them a feeling that if they do not fit into one enterprise they have at least some opportunity of changing their employment, we shall discourage them. Very often the desire to change employment is a purely personal matter. The person concerned may not happen to get on very well with the man in charge of his department. There may be some personal antipathy which destroys his feeling of freedom to carry on his work.

Mr. Philip N. Hocking: I have followed the hon. Lady's argument every closely and I am not entirely out of sympathy with what she has said, inasmuch as there are many Courtaulds research laboratories in my constituency. Her right hon. Friend the Member for Battersea, North (Mr. Jay) said that I.C.I. had not invented Terylene, but

that it had been invented by a much smaller company. In those circumstances, would it not still be possible, after the merger, for many people who are at present producing new fibres—and there are many—to be able to continue to produce them, in smaller units?

Mrs. White: We do not need to use that as an argument for the integration of the present two companies. As a matter of fact, it was Calico Printers, and not a small firm, who discovered the Terylene secret. Some companies have been dependent upon certain foreign research—especially Italian research—but that is neither here nor there when we are discussing whether we should put our main research facilities into the hands of one organisation.
There are many other reasons why we should look with considerable caution at the agglomeration of financial power and quasi-political power which may result if this tendency towards very large concentrations develops in our economy. The state of affairs existing in this country is not entirely comparable with that which exists in the United States. I am quite aware that in the United States the level of imports in most manufactures is so low that if a monopoly is created there it is a genuine monopoly, without competition from outside. That is one reason why the United States has taken such determined action, over many years, by way of its anti-trust laws, and so on.
But, granting that the conditions in the two countries are not the same, surely we may learn something from studying the American experience. When the right hon. Gentleman was dealing with the details of the way in which the matter could be handled be did not do what I have done quite recently, which was to go to the American Embassy and read up some of the Congressional papers there. For instance, I read Senator Kefauver's evidence and also that of the Assistant Attorney-General in the Department of Justice, who deals with anti-merger legislation.

Mr. Erroll: I would have dealt with the American question if there had been time. I did not want to take up more time than I did. My right hon. Friend will deal with the American practice in his winding-up speech.

Mrs. White: I am delighted to hear that we shall have a treatise from the Chief Secretary on the American practice. I am sure that it will be most illuminating.
The suggestion was made that there would be undue delay. Many of the arguments put forward by the President of the Board of Trade were directed to the suggestion that it is not practical to try to stop something before it happens. He suggested that we should wait until after it had happened, and then see whether the people concerned behaved properly. The whole trend in the American practice—and they have much more experience than we have in these matters—is quite to the contrary. The trend there is to say, "It is foolish and wasteful to wait until something has happened; we should, in appropriate circumstances, stop it from happening."
Some very good arguments have been put forward on that point, since the Amendment of the Clayton Act in 1950. Unfortunately, the Act was not amended sufficiently. The Americans failed to incorporate a provision requiring prior notice to be given of proposed mergers beyond a certain size. It would appear quite obvious—and Senator Kefauver is trying to catch up on this—that if the Government wait until there has been a merger it is very much more difficult to deal with it than it is to deal with a proposed merger.
Some of the recent discussions in Congress have shown that cases which have occurred in the United States involving vast corporations, have taken years and years to complete. The effort to try to find ways of unscrambling something once it has been scrambled is not only intensely difficult and disrupting in itself, but, over a period of many years—not weeks or months—dissipates the energies of some of the ablest people in the enterprises and also takes up an undue amount of the time of the Government Department which has to study the matter. In other words, it is quite clear from the experience of the Americans that the effort to study a merger before it takes place is a very much more sensible practice than to wait until the amalgamation has taken place and then to try to unscramble it.
There is much to be said for the Government's taking this attitude in

respect of the present merger of I.C.I. It is true that we do not yet have precise standards of reference. On the other hand, we have an instance, here, in which public concern has been very much aroused. People want to know why it is that I.C.I. wants to take over a firm like Courtaulds. I confess that Courtaulds, in its financial management, has asked for this. If Courtaulds had been as alive financially as it has been in research in the last few years since the war I do not think that this situation would have developed.
It has been suggested that one of the things that I.C.I. is looking at is the £20 million or so in cash and stock which Courtaulds has salted away. This would be very useful to I.C.I. That has nothing to do with any improvement in the industry. I.C.I. very much needs a little bolstering up, and sees this as a way of achieving it. Unfortunately, Courtaulds' top financial management, and also its public relations—until very recently—have not been all that they might have been. I had better not say more, except that there is now a vigorous change for the better, and it is to be hoped that that change has come about in time to prevent this proposed takeover.
I know that there are many other hon. Members who have a close interest in this matter, and, therefore, I do not wish to take up the time of the House further, beyond saying that I am sure that one of the reasons why the President of the Board of Trade has taken such a completely negative attitude over this matter is that, with Conservative philosophy, it is difficult for him to see what he could do next. If the right hon. Gentleman had an inquiry, what would he do? He and his right hon. and hon. Friends have spoken about competition. But it is clear that their allegiance to competion is very half-hearted and they have no real alternative.
There may well be cases—this may be one of them, but we cannot tell because we have not enough knowledge of it—where a large-sized integration, even monopoly, is desirable. Yet, were one to have no kind of direct link with public interest, what sort of protection are people to have against the temptations which a monopoly always brings?


I repeat that, with a Conservative philosophy, there is no solution to this, and, therefore, it is no surprise that the party opposite does not wish to touch the matter at all.
On the other hand, we have stated clearly in our document, "Signposts for the Sixties," that we recognise that mergers of this kind may, in certain circumstances, be inevitable and even desirable. But we say that if they are so, they should, nevertheless, not be allowed to go ahead without a guarantee that the public interest is secured, whether or not by some degree of public ownership would be a matter to be decided in each case.
I think it fair to say that we on this side of the House have a solution to this problem which certainly is not shared by the party opposite. By our suggestion that there should be a full inquiry we are suggesting something which might lead to action in the public interest, in the interest of consumers and workers, and not merely shareholders. I think it completely false to suggest that there is nothing wrong in a matter of this magnitude being decided entirely by shareholders who have been offered terms which will bring them possible short-term advantage, quite irrespective of what the long-term outcome may be.

5.43 p.m.

Sir John Vaughan-Morgan: If, in her concluding words, the hon. Lady the Member for Flint, East (Mrs. White) thinks that she has propounded an alternative policy, it was not clear to any hon. Member on this side of the House. She referred to an inquiry, but she became studiously vague about what action would follow an inquiry. I must say at once that I have no constituency interest in this matter, and no financial interest either. I think that is helpful, because I do not have to spend time explaining the virtues of rayon, nylon or any other fabric which might happen to be made in my constituency.
I welcomed my right hon. Friend's recent announcement that he was initiating a review of Government policy. When I first heard that mellifluous phrase I thought of the immortal Mrs. Beeton's recipe, "First catch your hare", I hoped that it would be made

crystal clear to me before we came to this debate what was the existing policy. I think that my right hon. Friend gave us some idea of the goal towards which he was steering. He was asking for the views of industry and I am sure that he will welcome also the views of hon. Members on the back benches. It is no secret to him, I am sure, that there are many of us who have considerable misgivings about the situation in which we find ourselves today.
There are two decisions which we are discussing, one of which, in my view, is, so far, right up to a point, so far as it goes, and the other is wrong. I am talking, in the first case, about the decision with regard to the I.C.I.-Courtauld merger. I see that my right hon. Friend is in a dilemma, that we cannot at this stage have an inquiry which might not possibly have the effect of offsetting or preventing a merger which may well be ultimately in the public interest. But I shall come on later to what I think he ought to be doing now. It is certainly wrong to mistrust mergers as such. I am sorry that the right hon. Member for Battersea, North (Mr. Jay) is not in the Chamber, because the firm in his constituency with which I am most closely associated is itself a merger, going back over many years, of, I think, something like 30 to 35 companies. I should have pleaded with the right hon. Gentleman at least to give us a good reference as employers.
I believe that "monopoly" has become a misused word, that the very existence of a monopoly does not in every case involve, necessarily, any danger to the public interest, particularly where, as in so many cases, the extent of the competition is not always realised. I speak of one industry with which I am closely associated and in which the firm controls 90 per cent. of the output in this country. But it is facing constant competition from alternative methods which keeps the firm on its toes. This inter-commodity competition, as it is called in the jargon of the economists, is a far more realistic fact and check than many people realise.
I am strongly in favour of any action which we could take to throw off restrictive practices. Not necessarily a merger or monopoly, but the old restrictive practices should be done away


with. We must recall that the Restrictive Trade Practices Act was one of the factors which led to more mergers than anything else. We may get rid of price agreements, and we should. But if a few inefficient firms, which were propped up by price agreements, are driven to the wall, in my view that is so much the better. But do not let us complain that there are too many mergers. I am glad to say that we are moving, at last, into an era of freer trade and, I hope, the sooner the better, particularly as regards getting into Europe. Nevertheless, for social, economic and industrial reasons, I believe that Her Majesty's Government have to keep a rather more watchful eye on the scale of business than they have done so far.
I come to the I.C.I.-Courtauld merger. I think that, so far, my right hon. Friend is right. We cannot count, let alone kill, our chickens until they are hatched, and an inquiry at this stage could do much more harm than good. I should like to know whether my right hon. Friend has warned the Chairman of I.C.I. that already there is a prima facie case for referring Courtaulds to the Monopolies Commission and that if this merger goes through he will at once refer it to the Commission. That will in no way—if it goes through—inhibit the change. But it will mean that an inquiry could proceed concurrently and that the directors of the mammoth that takes its place will know and will be able to give the information to the inquiry that will be needed in order to make recommendations. If necessary—I think my right hon. Friend gave this assurance—the Government might have to take powers to unscramble the omelette or, at any rate, divide it up afterwards. That is not impossible. It has been done in America and it could be done here.

Mr. Arthur Holt: Surely what the hon. Member has just said is a clear threat to I.C.I. and he intends that the Chairman of I.C.I. should understand it as such, but just before that he said that an inquiry now might do more harm than good. Those two statements do not seem to tie up.

Sir J. Vaughan-Morgan: Certainly they do, because I think that at this stage an inquiry might lead to considerable

uncertainty, but once the merger has taken place an entirely new situation would be created.

Mr. Cooper: The whole argument in the last few weeks has revolved round the man-made fibre situation. I assume that it is in that connection that my hon. Friend would like this inquiry to take place, but is he aware that if this merger takes place as a side-wind the two companies will control 40 per cent. of the paint industry of the country? Is that not a monopoly situation?

Sir J. Vaughan-Morgan: Yes, 40 per per cent. already qualifies under the Monopolies Act. My hon. Friend endorses my point. I think that most of us—I hope the Liberal Party, at long last—are convinced of the need for more publicity in these matters. I was searching the other day, and enlisting the aid of the right hon. Member for Battersea North, into the relevant quotation from Adam Smith, which should never be forgotten:
People of the same trade seldom meet together, even for merriment or diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
I think that is still true whether it is under the roof of Thames House, East, in the nationalised industries, or in the boardroom of the Co-operative Wholesale Society. In the long run the principle is the same.
There is a further step which my right hon. Friend should take in this matter. It lies in the field of tariff protection. I think I am right in saying that this country now has the highest tariff in Europe. Many on these benches think that that is probably the cause of some of the flabbiness which exists in certain quarters. So far as I can understand the rather technical jargon of the relevant tariff codes, our tariff is higher than that generally prevailing in the European Economic Community, except for one particular item. I want my right hon. Friend to say why in the monopolistic position which might arise he would not advocate, if necessary, a reduction, or rather a suspension, of the existing duty. That would certainly please the users and would meet some of the misgivings which they might have at present.
Of course, I already have the advantage of knowing all the arguments which my right hon. Friend would deploy. He may say that it is a useful bargaining weapon and one which we should not sacrifice without a quid pro quo. I know all the arguments because I used them myself in Committee on the Tariff Bill against the rather silly suggestion by the Liberal Party for an across-the-wall 50 per cent. reduction. Now things have changed and there is no argument for an across-the-wall reduction, but there is an argument for a weapon of suspension or reduction in these circumstances.
My right hon. Friend might also say that he has not actually got the powers without having the usual inquiry, which takes something like two years. I suggest to him that in that case he might use the type of powers he has under the Fourth Schedule and that he should seek powers from this House to suspend duties to cover these cases where he is not satisfied that adequate competition exists in this country. In this case action would be justified by a quotation from I.C.I.'s own manifesto, or blast, in the present dispute. I am quoting a paraphrase of it in the Economist. It said:
The directors attribute this sharp drop in profits to big falls in chemical prices, to the deliberate adjustment of prices to competitive levels in anticipation of Britain's entry into the Common Market.
I can only read into that that in this sphere, perhaps also in man-made fibres, they have been sheltering behind the tariff. I hope that we can have an assurance that they will be deprived of that shelter, because I am sure that it applies to man-made fibres as well.
I turn now to the other decision, on the Imperial Tobacco Company. I share the views of the Commission and, I think, of most hon. and right hon. Members, that it is a most responsible company and a very good employer. I was at the Ministry of Health when it fell to me to make the announcement about smoking and lung cancer. The behaviour of the company on that occasion was in marked contrast with that of the companies in America. I also know it as an employer in Africa where it is a model of enlightenment. So I hope that nothing I say will be taken as in any way derogatory to that com

pany, but I think that the decision of my right hon. Friend in regard to Gallahers' shareholders was a mistake. I think it was a bad decision, and I am not convinced of any of the arguments he has put forward for it today. Of course, I accept that the Government do not have to accept all the recommendations of the Monopolies Commission, but this was a serious snub because it was probably the first major recommendation which has been rejected——

Mr. Erroll: No.

Sir J. Vaughan-Morgan: —and I should feel quite differently if I were a member of the Monopolies Commission. My right hon. Friend has given two reasons for his decision. I think I am right in saying that the first is that competition has increased and, the second, that the Imperial Tobacco Company has agreed not to interfere with Gallahers. Taking the figures for competition, the figures of the Imperial Tobacco Company and Gallahers together, the percentage of the trade in 1956 was 94·7 per cent. and in 1959 it was 92·9 per cent. It was on the basis of those figures that the Commission made its recommendations.
My right hon. Friend says that competition has increased. I wish I could find evidence for that. Yesterday I asked him a Parliamentary Question. I asked for a breakdown of the figures for the Imperial Tobacco Company and Gallahers and the others. He referred me to the 1959 figures. Perhaps at some time he could enlighten us about changes which there have been since that date. One thing which is quite certain is that competition has not gone so far as to cause either of these Titans to totter. To me it is a mock battle between the two. If Imperial Tobacco loses on the swings, it gains 37½ per cent. on the roundabouts. Of course, this blunts the edge of competition. My right hon. Friend knows that any company which buys the trade investment of a competitor in the same line does so to enlarge its market. There can be no other very valid reason in my view.
The second reason which my right hon. Friend gives is that the company has given a guarantee of no interference; it has neutralised its shareholding. I think that that assurance should not have been given by Imperial Tobacco Company,


although I accept entirely its responsibility, honesty and sincerity in giving it. It should not have been given and should not have been accepted. It may be that the shareholding is too large to sell. It may be that would be unfair to Gallahers' shareholders. My right hon. Friend suggested that it should be sold, but is that his concern? Is he the watchdog of Gallahers' shareholders?
There is an alternative. Why should there not be a distribution of the shares in Gallahers to shareholders of the Imperial Tobacco Company? Let them make up their minds whether they wish to have their money invested in a rival concern. Let them decide that for themselves. My right hon. Friend may say that there is a taxation reason. If so, let him give that reason, not the one he has given. If it is taxation, then all I can say is that it is about time he persuaded the Chief Secretary to the Treasury, who is sitting on his left, to look at taxation and to consider its effects. The rights in this matter of the shareholders of the Imperial Tobacco Company seem to have been entirely forgotten.
There is another aspect of the matter. We read in a report that Imperial bought the majority control in Gallahers to keep out American competition. At the moment the American Tobacco Company holds 13 per cent. in Gallahers. What is the effect of the neutralisation of the Imperial Tobacco Company's share in the equity? It is—I do not necessarily say that it would be a bad thing—that the American Tobacco Company now has to acquire only 18¼ per cent. to secure majority control. What would happen in that case? Would Imperial Tobacco Company fight the endeavours of a more vigorous competitor or would it acquiesce, and completely nullify the effect of its holdings?
This illustrates, in my view, the extraordinary position which has arisen from this curious decision. I think that there are lessons to be drawn from this and also from the I.C.I.-Courtauld battle. There are too many firms—responsible, upright and admirable employers—who treat their shareholders and the general public like children. They refuse to divulge information, they are far too secretive about their success and their failure. Then comes a crisis, and all the

figures and the information are suddenly available to all, just as in a siege the beleaguered defenders rush around and reluctantly arm the striplings, the women and the children. It is a thoroughly unhealthy trend.
I hope that my right hon. Friend will recall that he, too, has a responsibility to see that the companies law is up to date. We are awaiting the Jenkins Report, but I do not think that many people, including the Government, are as alert to this danger—perhaps that is an exaggerated word—or to this trend as they ought to be. I think that in the present state of our economy, when we are fighting for our share of world markets, we must be untrammelled by some of the rather outmoded attitudes towards big business which exist.
I should like us to move far more towards—not the whole way but towards—the American attitude on monopoly and cartels. The American attitude is inimical to all concentrations of power, whether they are in private or in public hands. In that great nation they carry the attitude perhaps too far, but certainly I should like to see us moving a long way along these lines. We need as soon as possible to strengthen the Monopolies Commission, to restore it to its pre-1956 size, and to give it powers to sub-divide and to produce more reports, and we need to back up its recommendations—all of them. If we cannot back them all, we should give rather better reasons for not doing so than my right hon. Friend has given on this occasion.
I have known my right hon. Friend for many years, and I think that his views and mine on these matters run in parallel. Certainly I hope that we are not far apart in our views and that my right hon. Friend will help to bring us closer together.

6.4 p.m.

Mr. Austen Albu: The lines of thought of the President of the Board of Trade and those of the right hon. Member for Reigate (Sir J. Vaughan-Morgan) may be running in parallel, but that only means that they are never likely to meet.
Seriously, I think that the House has not listened for a long time to such a thoughtful, witty and devastating speech as that made by the right hon. Member


for Reigate. If it is not impertinent, I should like to say that on one matter the right hon. Gentleman made a suggestion which I had intended to make. It concerned tariffs. The suggestion of the removal or suspension of tariffs in cases in which there is a serious danger of monopoly in the home market seems to be one which the Board of Trade might seriously consider, at any rate during the period before that in which we enter the Common Market, if we ever do enter the Common Market.
There are two ways of handling a bad case. One is the way of the right hon. Gentleman the Minister of Housing and Local Government, which is to bluster and bang the Box and make a loud noise, and to get the House thoroughly disturbed so that nobody can hear what the case is. The other is the method employed by the President of the Board of Trade, which is to read, from a long foolscap document, a lesson in economic theory until the ears of the House are closed.
The right hon. Gentleman the President of the Board of Trade made some extraordinary statements, particularly in attacking my right hon. Friend the Member for Battersea, North (Mr. Jay). I particularly liked his quotation from my right hon. Friend's recent book on the ability of little men—he quoted some of them—to build up the substantial businesses which they now head. Can he tell me which of the present members of the I.C.I. or Courtauld boards were the little men who built up those businesses? If he can, I shall be very interested to know the answer.
We are all concerned with the public interest, and we know how difficult that is to define, but I think that in this case the public interest can be divided roughly into two. There is the interest of the public as consumers and there is also the interest of the public because its standards of living depend on an expanding economy, which means an expansion of exports. In considering the question of the degree of monopoly or of mergers, we have to balance these two interests. This is what the right hon. Member for Reigate meant when he referred to what was taking place in so many industries, including his own, a very successful scientific industry.
But these interests will not be balanced by a policy of Government abstension or laissez faire, a policy by which the Government take no part in the processes which are going on. That is my view and I think that it is shared by my hon. Friends. None of us doubts that there must be a reasonable degree of competition. This is essential for the protection of consumer interests. I believe that it is even necessary in industries which are in public ownership—not necessarily competition between the same services and the same products, but competition between alternative products or alternative services. I think that I am right in saying that none of the industries at present in public hands is not subject to competition of that sort.
If competition becomes impossible or is substantially reduced, then a greater or lesser degree of public control becomes essential. We must either have an industrial system which is based either on competition or one based on public control.
There is no doubt that the most undesirable form of monopoly is that of price fixing. The right hon. Gentleman said that the Restrictive Trade Practices Act has been successful. I agree with him that in the first year or two it had very substantial results. Some of us who had to look at the effects in one or two industries know that it brought about an enormous change and an extraordinary reduction in prices. I remember that in one commodity which I examined, and which is used both by nationalised industry and by private industry, the prices went down by 40 per cent.
But anybody who reads the latest report of the Registrar must be well aware that since that time firms have found ways of getting round the decisions of the court. They have done this, as my right hon. Friend pointed out, by the so-called information agreements which are mentioned in paragraphs 10 to 14 of the Report. By these agreements, companies inform each other of their prices. If they have had a habit of maintaining prices, they continue to do so, and even if they have not been in that habit, if one or two firms are leaders the others will very often follow the prices given in the


information. There has to be the will to compete; otherwise, competition does not take place.
In my opinion, there is a need to provide a method of inquiring into the effect of the ending of registered agreements—in order to find out whether, when they are legally ended, they are in practice ended. This will mean some change in the present powers of the Registrar, but I think that they are powers which badly need to be enlarged.
It is true that some mergers, even when they lead to near monopoly, may increase efficiency, and may increase the rate of innovation. It is also true, as the right hon. Gentleman said, that price-fixing arrangements sometimes prevent necessary mergers from taking place. If the control of price fixing is made more severe, or if these informal price agreements are in some way prevented, it will undoubtedly lead to more mergers. The trends today are all in the direction of mergers, sometimes for financial reasons, as my hon. Friend the Member for Flint, East (Mrs. White) has said—and there may be something of this in the present proposals of I.C.I.—but also for technological reasons, such as the great increase in the cost of research and development, and of the size of plant. There is also the growing world competition, including that in some markets which used to be considered our own markets, in the Commonwealth, where we are finding growing competition with our own products, and in the Common Market. It was for some of these reasons that the Minister of Aviation brought about the merger in the aircraft industry.
There are other industries in which discussions are going on about similar needs. There is the situation in the heavy electrical industry, with the increasing size of a single generating plant and the extremely high cost of some of the more advanced types of research, like electro-hydrodynamics. There may well be a need for an increased concentration in marine engineering, and I cannot believe that even today there is room in this country for five mass-production motor-car firms, and, if we go into Europe, certainly no room for ten or a dozen such firms. There may well be a good many pro

ducts in which we have too many firms making the same thing, and I am sure that this applies to some domestic electrical equipment.
This leads to a very serious situation, which we have to consider, but what we are considering today is not just a simple merger or the reduction from five motorcar firms to three. We are considering a merger which will result in the control of 90 per cent. of the output of a single product. This is monopoly. There is a way of deciding whether a degree of monopoly warrants Government interest, and this yardstick has already been laid down in the Monopolies Restrictive Trade Practices Act: it is when a firm controls one-third or more of the output of a particular industry.
I believe, as my right hon. and hon. Friends have said, that it is essential to have machinery which can take the initiative before a merger takes place. The argument that we cannot tell what the effect will be does not hold water. It seams to me to disclose a degree of amateurism in the Board of Trade which I cannot believe really exists. The Board of Trade must surely not only have resources itself but be capable of drawing on resources to make the necessary inquiries, or, alternatively, such a body as the Monopolies Commission or some similar body should certainly have the resources, legal, economic and technical, to make the sort of inquiry which is needed to find out whether or not a proposed merger is or is not in the national interest. This inquiry would have to determine the reason for the merger, and whether it is justified, the effect on the consumers at home, in the first place; secondly, on other industries and consumers, and, thirdly, the effect on the economy generally, particularly on exports.
There is no doubt that the speech which we heard this afternoon, re-emphasising what the President of the Board of Trade called a policy, which was really a self-denying ordinance on the part of the Government and a refusal to take any part in the economic process, makes absolute nonsense of the Government's new-found enthusiasm for economic planning. I do not see how they can possibly set about the setting up of a large body, to examine all aspects of the economy, to assist in the


planning of investment, and, as the Financial Secretary to the Treasury said yesterday, even possibly taking account of scientific changes and having some scientific advice, if we are to allow very large firms, controlling a very large part, not only of the research and development but of the investment, employment and manufacture of certain products in this country, to come into individual hands, so that unless some other action is taken, they will be very difficult to control.
If they do come into individual hands, any Government which want to carryout a policy of economic planning or carry out decisions based on recommendations from the National Economic Development Council, would be forced to take such a large organisation either under public control or in one way or another, to participate in the decisions which it makes. The Government must inevitably face that. Personally, I do not know where are the rights or wrongs of the Courtualds I. C. I. issue. There are a great variety of arguments being used. I am not sure I agree with my hon. Friend the Member for Flint, East on the question of cheaper fibres. It may well be that advanced industrial countries have to give up making the simpler and cheaper products and make the more expensive ones while importing the cheaper ones, in the same way as we have had to do, to some extent, in the textile industry as a whole. This is not an argument that we can decide, but I can see the case for giving up making the cheaper products, and going into the production of the more expensive and higher conversion ratio products, but these are matters which an inquiry should ascertain in order to see whether the effects of such a merger would be in the national interest. Without such powers, not only are the consumers in this country in jeopardy but the whole business of economic planning seems to me to be made infinitely more difficult, if not impossible.

6.17 p.m.

Sir Harwood Harrison: It is over seven years since I last made a speech in the House, not due to any lack of desire on my part, but because,

by the traditions of the House, the positions which I had the honour to hold in the Government precluded me from taking part. I have, however, listened to a great many speeches from the Treasury Bench, and I have often felt that many excellent and sincere speeches were rather spoiled by the hon. Member concerned going on too long. I will try not to commit this fault myself, and to confine my remarks well within twenty minutes.
In arguing against this Motion, I should, first, declare an interest. I have a factory of I.C.I. in my constituency. Very recently, large sums were spent in modernisation and new plant. I have seen personally, and I know from talks with people concerned, that the factory runs their business efficiently, and that its labour relations are good. As is commonly known, many of the employees are shareholders themselves. I think that it is true to say that many of them have been rather shaken by all the publicity that has surrounded this firm during recent weeks, and they do not know quite what to make of it, although, naturally, they remain loyal to their firm. Perhaps I should also say that my wife holds a few shares in Messrs. Courtaulds.
We face a far bigger issue than the inquiry suggested into this case. The whole existence of our country and our high standard of living depends on our export trade. All our attention should be directed towards finding whether our firms are prepared to play a greater and expanding part in this vital drive. I was rather disappointed that neither of these firms, big exporters as they are, paid any attention to this problem in the first memoranda that they produced. I was glad to see that the statement issued by the I.C.I. last Friday started to mention exports, and it brought a counter-reaction from Courtaulds.
It is well known that this country has a mixed economy. We in the Conservative Party have accepted the nationalisation of certain industries; but these industries, whilst requiring much capital investment, contribute little or nothing in direct exports. It is true that by better communications or cheaper sources of power they can play a contributory part.
The other section is what we call private ownership—private enterprise. If ordinary people were asked what they


conceived by private ownership, I think that their answer would be the right of any man to run his own business. Their conception is of the small firm—the small manufacturer, the farmer, the shopkeeper—where ownership and management are roughly in the same hands. But today in most of our large public companies management is completely divorced from ownership. Perhaps the criticism could well be levelled against this type of company that in recent years it has been too concerned with the wellbeing of those within the firm and not sufficiently concerned with keeping its prices low.
This or any other Government must look very carefully at this new pattern along which our industry in the private sector is developing and apply to it one vigorous test: are the activities of a particular firm contributing to our export drive? This is quite as important as whether an industry is a monopoly and not acting in the public interest by selling at too high prices.
No doubt these thoughts were in the mind of my right hon. Friend the President of the Board of Trade when he had talks with the two chairmen concerned. If we enter the Common Market, a merger such as this might well be advantageous to our export trade. Equally, if we do not enter the Common Market the reverse might apply. I understand that the exports of I.C.I. have expanded and increased in each of the last ten years. In 1960, they were over 26 per cent. of their production in this country. I hardly think that an inquiry would help over facts like these.
In a short debate on 18th July, 1952, nearly ten years ago, I raised this question of our export trade. Nothing that has happened since has caused me to alter the opinions I then expressed. In fact, I only wish a few of the ideas I put forward had been followed. My right hon. Friend the President of the Board of Trade has travelled extensively. There are more markets available to us than is generally recognised. I will quote two examples. A friend of mine from the City of London fairly recently went to Alaska, and very excellent business resulted from his visit. This is good individual enterprise.
A firm in my constituency, Munton and Fison, now exports over 10 per cent.

of its malt products to over 22 countries throughout the world. The managing director of the firm is in India at present. I know from my talks with representatives of the company that this side of their business is not the most profitable, but they believe it is wise, both for themselves and in the national interest, to export their products.
I believe that there are far too many firms not prepared to enter the export market because it has been too easy to sell in the home market, or, because of the high level of taxation, they think that the risk is too great. It is imperative for the future of the country that more medium-sized firms—those employing 100 to 1,000 workers—should be induced to enter the export market. An excellent amount of guidance and help is given by the Board of Trade. We in industry are grateful for the extended guarantee of credits, but this applies only when goods have been sold. I believe that in the national interest some timid firms might well be taken over by bolder spirits.
I do not believe that it is enough for our trade attachés in foreign countries merely to say, "Buy British". I believe that they have got to be able to name individual firms. This may be a revolutionary step, but it is sheer common sense. I should like my right hon. Friend to compile a list of exporters of reputable goods and say that they can be mentioned by name in any country in the world. In return, we should have to ensure that these firms kept to delivery dates, packed their goods well, had spare parts available, and would put any faults right quickly.
To take an example, when a trade attaché, say in Tasmania, found that there was a sudden increased demand for lawn mowers, he would consult his list and see that the Suffolk Punch mowing machine, produced by the Suffolk Iron Foundry, is the most suitable machine for this market. There would have to be a direct link with the firm concerned and no "red tape". If there were such a list, it might well encourage firms not on it to get into the export market.
Speaking from my own experience of the export market, which is not inconsiderable, I say this to every manufacturer. However good the home


market appears today, it will not always be so. Already, there are many imports competing in our own home market under a tariff. If a manufacturer is wise, and is thinking of exporting in 1964 or 1965, it is about time that he began tooling up.
My right hon. Friend the Prime Minister has in many speeches stressed the importance of exports. He did so at the Guildhall only last week. The Leader of the Opposition has spoken in similar vein. The Government must continue to do more than just utter words of exhortation. We all have different ideas of what could be done. I have thought that the Profits Tax might be lower on that portion of a company's trade which goes for exports, but from correspondence I have had with my right hon. and learned Friend the Chancellor of the Exchequer I gather that the Treasury does not think this practical. Might not increased depreciation allowances be given? Are ours as high as all other industrial countries in Europe?
Sir Oliver Franks, the Chairman of Lloyd's Bank, made some very interesting and pertinent remarks in his annual statement. In his view, contrary to the general belief, our prices are not too high. They are on a par with those of Germany and below those of the United States. Our costs of production are still favourable to us. His conclusion is that there is nothing to prevent us from meeting the challenge of overseas competition and regaining our former share of world markets, but this will not happen unless we are prepared to put right the things we know are wrong with our economy. These defects may well be the hidden reserves which will enable us to mount a real export drive.
I am glad that we are to have a productivity year. This is excellent, but not enough in itself. Increased production, unless goods are sold in the right markets, may be a millstone round our neck rather than a blessing. Selling the goods is not enough. They must be paid for. It is on this second point of selling that we as a nation show weakness. I will throw out another suggestion.
During the Productivity Year could we not emphasise selling by, for example, having a great national competition with suitable awards? We

might even take it further and have a private contest between Lord Beaverbrook—offering a prize of £5,000 or £10,000 to be shared among the members of the firm with the best record of exports in the Commonwealth—against Lord Glad win and his associates to the firm with the best record of selling in the Common Market countries. Only with ideas such as these will we bring home to the men and women on the factory floor the importance of our export trade.
We in East Anglia very much appreciated the visit of the Minister of State, for it did much to encourage the efforts of many of the firms in the area. I am sure that these sorts of problems will be studied by the National Economic Development Council which the Chancellor has so wisely set up. The N.E.D.C. must surely be the answer to this Motion and I therefore support the attitude of the Government not only towards the Council, but to the debate as well.
While the Government are showing their wisdom in this matter, no Government can be complacent about the present pattern of our industrial life. The Government must fashion it in such a way that it is a useful weapon to achieve the aims of all hon. Members. We must particularly watch the amount of capital investment and see that the maximum is given where it will produce the best results in the export markets. If we are not successful in our export drive our general financial position will be weakened, our prestige in the world will be very much reduced and our ability to help the new independent countries of the Commonwealth will disappear.
If I may conclude on a personal note, twenty years ago tomorrow saw the fall of Singapore, the end of one of the most disastrous military campaigns in our history despite many brave actions on the part of men and companies, soldiers and airmen. That was brought about by a lack of forethought, lack of preparation, idleness by many people out there and a lack of leadership. Today, we have all the advantages, so do not let us dally and delay. After all, we have a Prime Minister who has had years of commercial experience and under his leadership and with the inventive genius, skill, and ability at all levels in industry we can meet and win this challenge.

6.33 p.m.

Mr. W. A. Wilkins: I am sure that all hon. Members welcomed the vigour which the hon. Gentleman the Member for Eye (Sir H. Harrison) displayed this afternoon after seven years of silence. I can appreciate how the hon. Gentleman must feel because I had twelve years of silence and I found it an extreme penance to have to serve. However, I cannot follow the observations of the hon. Gentleman, some of which seemed a little wide of the subject under discussion.
I think that I am being fair in saying that most of my hon. Friends are not necessarily—and I mean "not necessarily"—opposed to monopolies, provided they are public monopolies. What we oppose and challenge is something which I would like to have seen more vigorously taken up by speakers today; the behaviour of monopolies, for their behaviour should be receiving our greatest consideration.
The debate so far has taken the course which I had anticipated, but I must make an observation concerning the speech of my right hon. Friend the Member for Battersea, North (Mr. Jay), whose remarks to the President of the Board of Trade over the Monopolies Commission findings and the decision concerning the Imperial Tobacco Company were, I think, rather vicious. I have personal knowledge of this situation, because the major factories and headquarters of this company are in my constituency and I have spent a considerable amount of time, especially at General Elections, outside the factory gates speaking to the employees.
At the time of the 1959 General Election the first question those employees put to me was, "Will the Labour Party nationalise the tobacco industry?" I make this point deliberately, because I wish to relate it to the remarks made by my right hon. Friend about the President of the Board of Trade. I am a believer in public ownership, but I am rather "choosey" about the things I would wish to see taken into public ownership. I am far more concerned about those things which are vital to the nation's economic life than I am about the industries producing articles which must surely come into the luxury category. Thus, I would not put the

tobacco industry on top of the list, but some way down it.
I say this to my right hon. Friend the Member for Battersea, North, because both he and the right hon. Gentleman the Member for Reigate (Sir J. Vaughan-Morgan)—who made an extremely interesting speech—failed to do justice to the argument which they were adducing. When referring to the Imperial Tobacco Company, the right hon. Gentleman the Member for Reigate used words to the effect that Imperial Tobacco had taken holdings in Gallahers because it would receive a 37½per cent. dividend.
Imperial Tobacco made its investment in Gallahers because the company hoped, I suppose, that it would draw a reasonable proportion of dividend from that investment. Both of these right hon. Members, when referring to this matter, were guilty of a slight injustice, because they did not refer to the circumstances and the time when this holding was taken. It was taken, in fact, in 1932, or about thirty years ago, when Imperial Tobacco thought—rightly or wrongly, I do not know; but, considering that the British American Tobacco Company has a factory in my constituency as well, Imperial Tobacco's decision was probably right—that there would be a direct threat to its operations by big American interests coming to this country and buying up many of the tobacco interests here.
At that time Imperial Tobacco, faced with possible big American competition, was somewhat dismayed and thought that the best thing that it could do would be to try to get some sort of control over the tobacco industry here. Of course, Gallahers was a negligible competitor to Imperial Tobacco at that time but today Gallahers is one of the most prosperous and certainly one of the most energetic competitors to Imperial Tobacco.
I have made these comments because I believe that any hon. Member having a constituency problem or opinion—be it raised by an individual, an organisation or a business firm—should make those views known in the House. Every constituency interest should know that it can be represented here. The major burden of the case made by various hon. Members has quite rightly been directed


to the proposed I.C.I.-Courtaulds murder—[Laughter.] I meant "merger", of course, but I suppose that, in any case, it would, in effect, almost be one and the same thing.
I have been intrigued by what appears to be the new doctrine or slogan of the Conservative Party. I imagine that the President of the Board of Trade took it from the first paragraph of the document circulated to us by I.C.I. The slogan is, "Eliminate home competition in order that we can compete with foreign competition." That apparently being the new slogan of the Treasury Bench, I suppose that it will ultimately be supported by the Government back benchers.
We would be well advised to re-examine the evidence at present available on the operation of monopolies, or cartel agreements that may well occur. I would commend to my hon. Friends, in particular, a book, now in the Library, written by my hon. Friend the Member for Bilston (Mr. R. Edwards). It is an absolute mine of information about monopolies throughout the world, but especially here. The right hon. Member for Reigate reminded us that not so long ago Courtaulds itself could be regarded as a monopoly—[HON. MEMBERS: "It still is."] Not to the same extent, I imagine, in view of the competition coming from other places.
In my hon. Friend's book there is one very interesting passage which has a lesson for us to learn. Incidentally, I am assured that none of his facts has ever been controverted. He writes:
By 1928, however, Courtaulds monopoly … process had been broken by the expiring of the patent and Courtauld's large profits, together with the increased demand for rayon products, had attracted a number of newcomers. Consequently, new companies sprang up in different parts of the country. The resultant competition"—
and this is the interesting part—
progressively lowered the price of rayon fibres until Courtaulds, who up to this point had refused to reduce prices, moved into the struggle, scattering their opponents and driving dozens of firms out of business by reducing prices by 15 per cent. in one stroke.
That is what we might expect as these huge monopolies grow, and spread their tentacles in this country—and probably internationally, as well.
In 1932, I.C.I. reached an agreement with I.G. Farbenindustrie, which fixed

prices, divided markets and limited competition in the European dyestuffs industry. As a result, the British Colour Users' Association complained that it could not purchase dyes at competitive prices and that, in fact, dyestuff prices had risen by 100 per cent. Therefore, I.C.I. and their associates were holding the consumer to ransom thirty years ago.
I say these things because I want the House to learn the lesson of history, although I would rather that people outside learned that lesson, and so knew how to vote in the next General Election. In view of all that evidence—and I have quoted only a couple of examples—why do we trust those people now? Why are the Government prepared to trust them if this merger takes place?
Advertising in the national Press last week, I.C.I. said something like this, "The merger is necessary in the country's interest in order that we can meet the severe competition from abroad." Does anyone seriously believe that, having monopolised the British man-made fibre industry, and having sewed up the lot in unbreakable nylon thread, those people will engage in an all-out competitive price war, in the sacred name of free enterprise, with Du Ponts in America and with I.G. Farbenindustrie in Germany? If anyone really believes that, he is either extremely naïve or, in common parlance, he wants his head examined.
I suggest that the sequence of events will be very much the mixture as before; more international agreements to eliminate a price war and to assure profits, more cartels, and, as a final result—and I beg my hon. Friends to remember this because, again, it is a lesson of economic or industrial history—more power for the people who own these monopolies to control our economic life.
Our complaint has always been that it is this kind of power, residing in very few hands, that has enabled those concerned to control our economic life throughout the years. That power should not reside in the hands of individuals. If we must have monopolies, they should be public monopolies, and I hope that my party will never apologise for that part of its programme, at any rate. I could at once name five principal industries—and there are a lot more than that—which, as I believe,


should, in the country's interests, be publicly owned.
In yesterday's Evening News I read:
Wolfson private empire to link with Drages.
There is this building up of private empires by individuals. Thinking people must now be getting anxious about the probable conduct of our industry as it gets into the hands of the Clores, the Frasers and the Wolfsons, who are rapidly becoming power-drunk financiers, building their trading empires to a point at which, one day, they must inevitably become monopolies.
They do that with the cognisance—even with the approval and the applause—of quite a few hon. Members opposite, who prate with tongue in cheek at election time about the little man who, in any case, is being rapidly "folded up" by the supermarket people and the other tremendous organisations springing up under the control of the so-called business geniuses.
Monopoly is a hateful thing. Who says that? The people who say it are on the benches opposite. I do not think that monopoly is a hateful thing, but I have here a document which I expect a good many Government supporters have forgotten. It is "The Industrial Charter—A Statement of Conservative Industrial Policy," written in 1947, after the 1946 Conservative Party Conference. The headline on page 10 is "Highwaymen". We on this side would never have thought of such a subtitle. A highwayman, according to Cassels, is a man who robs the public on the highway. I put this on the record so that hon. Members opposite who may have forgotten what their party was telling the public in 1947 and 1948 may have it ready to their hands.
The document states:
Making 'Corners' and Playing Ca-canny. A new piece of jargon has come into our langguage—'restrictive practices.' What does it mean? It means anything which prevents all-out healthy service by owners of businesses, on the one hand, and workers in businesses, on the other.
You have a restrictive practice when some people get together"—
Incidentally, I see that I have written at the top of my copy—I must have been going to a meeting about monopolies—"Tories now in power for five years

and they haven't done a thing about it".—
to keep down the supply of something and charge what they like for it. There is no competition. That is called a monopoly. Conservatives hate monopolies.
This is their own document. It goes on:
They believe in free enterprise which is the opposite. They believe that this is the way to keep fair prices and good quality. Therefore they will be stern in dealing with monopolies.
That is their Industrial Charter. There are many more references in this document, directly related to the monopoly situation, which I should like to quote but for the fact that I know that other of my colleagues want to take part in the debate.
This document is now shown to be a completely fraudulent prospectus. In eleven years, the Conservative Party, after using this document as a policy statement in the 1951 General Election and the two subsequent General Elections, has never, in fact, taken any serious action against monopolies after they had been investigated by the Monopolies Commission. I am not saying that it has not taken any action at all, but when one remembers that there have been 24 references to the Monopolies Commission and the number of times we have heard complaints in the House that the Government have refused to implement the conclusions of the Monopolies Commission, I think that we are justified in saying that the prospectus was a fraudulent one.
I am quite certain that Mr. Speaker himself would never have subscribed to it had he seen it before the elections took place.[HON. MEMBERS: "oh."] I really mean that. I believe that such terminology, which was obviously fraudulent, would not have been something that Mr. Speaker, when he was a candidate seeking election, would himself have subscribed to. I certainly would not, had I been asked to do so.
I hope that in consideration of the Motion we shall not be so much concerned about the insular considerations of individuals or firms in the constituencies which we represent. I believe that we are discussing a principle of very great importance. I hope that my hon. Friends who follow me in the debate will make their declarations, as I have


tried to do, on the question of principle and make clear our objection to this growing threat—the build-up of private empires which must inevitably become monopolies if they are allowed to go on.
I hope, therefore, that when it comes to the vote, especially as we seem to have a reasonable amount of support from some hon. Members opposite, we shall register our protest in the Lobby and tell the Government in the plainest possible terms, that not only should they have an inquiry into the question of the proposed merger of I.C.I. and Courtaulds, but that, if possible, they should say that the merger should not take place.

6.57 p.m.

Sir Hendrie Oakshott: The hon. Member for Bristol, South (Mr. Wilkins) began his speech in a very fair way, if I may say so, in regard to the Imperial Tobacco-Gallaher position, in which, as the Member for that constituency, he is, naturally, very interested. He was a little less fair, I thought, when he castigated I.C.I. for an arrangement with I. G. Farben which was made thirty years ago. He seemed to imply that this arrangement still existed. It came to an end long before the war—it did not last long.
Then the hon. Member had some fun with hon. Members on this side about our Industrial Charter. The document was produced in good faith by us in 1947 and was completely repudiated as unworkable and undesirable by hon. Members opposite and by organised labour. I shall say no more about it. Those are the facts. I do not think, after looking at my hon. Friends on either side of me that the hon. Gentleman was really serious in saying that they were a lot of highwaymen. I do not think that they look like highwaymen, or my right hon. Friends, either.
I start by advancing a proposition with which, I thought, the right hon. Member for Battersea, North (Mr. Jay) agreed, that in considering the actual terms of a merger such as the one now proposed—I want to confine myself to that—provided that the terms do not infringe the revenue or company laws, those terms are really a matter for the board of directors and shareholders of the two

companies and not for the Government and Parliament.[HON. MEMBERS: "No."] I understood the right hon. Gentleman to accept that that was so. Perhaps I was wrong. In my view, it is more to the general principle of mergers that we should address ourselves rather than to the actual terms of a possible merger which may not even take place.
The Monopolies Act works reasonably well, although, with the present tendency towards the growth of bigger units, it is perhaps a drawback that to some extent at least it works only after the event. The Restrictive Trade Practices Act has worked very well. The hon. Member for Edmonton (Mr. Albu) admitted this in regard to the first two or three years of its operation, but then implied that it was not working so well now, basing himself to some extent, I think, on the Report of the Registrar.
I draw to the attention of the House that my right hon. Friend the President of the Board of Trade instituted his review some time ago. In making his announcement to the House on 30th January, he said:
… I had already put in hand a general review of policy in the light of experience gained in the five years since Parliament passed the Restrictive Trade Practices Act in 1956."—[OFFICIAL REPORT, 30th January, 1962; Vol. 652, c. 896.]
No doubt, that review will bring important information to light.
I think that the Act has been effective not only because of the operations of the Restrictive Practices Court, but also because the existence of the powers under the Act has in itself brought about the cancellation of quite a number of arrangements which otherwise would have come within its net. In other words, the Act has had a cautionary effect, rather like the influence of the policeman on the beat.
There may be a lesson in this for us when we are considering how, in the future, we should keep our eye on the problem of mergers. We could, perhaps, apply to monopolies the same sort of ideas and principles as we apply to restrictive practices, and in this way begin at least to overcome the defect to which I referred a moment or two ago. Nothing in either Act says that all monopolies are bad, that all practices which contain an element of restriction are evil, or that size of itself is a matter for condemnation.
Like other hon. Members who have spoken, I should, I suppose, make clear that I am not a shareholder in either company, and I do not take sides in what I confess I find the slightly unedifying public controversy between two great companies. I wish merely to put briefly and, I hope, fairly, a few comments on how the matter strikes me.
First, with respect to the right hon. Member for Battersea, North, I do not believe that the device of a public inquiry is a good one to adopt. I accept absolutely the reasoning of my right hon. Friend. I think that it would inevitably lead to prolonged delay and uncertainty. It would take a very long time. I accept, also, that, with all the good will in the world, the members of the committee of inquiry, however expert they might be, would be looking into the future in a manner thoroughly conjectural.

Mr. Callaghan: The hon. Gentleman says that it would lead to uncertainty.

Sir H. Oakshott: No, prolong uncertainty.

Mr. Callaghan: Prolonged uncertainty, then. What is the urgency about it.

Sir H. Oakshott: I did not say prolonged uncertainty. I said that it would prolong uncertainty. I should have thought that, with all the publicity and the glare turned on to the affairs of these two companies, unnecessary delay could only be bad. I think that we want to have the thing settled.

Mr. Denis Howell: Oh !

Sir H. Oakshott: Certainly.
I do not suggest for a moment that the Government and Parliament should stand aside and wash their hands of this sort of development. On the other hand, I do not accept the charge that the Government are indifferent to the problem. Before this episode began, my right hon. Friend had already put in hand a review of policy which specifically includes the question of mergers and their possible effects in the future. On 30th January last, he made clear that the Government will look at the present powers and strengthen them if necessary. I welcome this very much, and I hope

that they will be strengthened. There is a case for doing so, in my view.
In another sphere, touching the matter of form rather than the substance of mergers and their effects, the Government have done something else. They have set up the Committee on Company Law, the Jenkins Committee. This was instituted by my right hon. Friend's predecessor at the Board of Trade in 1960. I draw the attention of the House to one passage in the terms of reference of that Committee:
To consider, in the light of modern conditions and practices, including the practice of take-over bids, what should be the duties of directors and the rights of shareholders; and generally to recommend what changes in the law are desirable".
Those terms seem to me to cover precisely the sort of problem we are discussing today, and I hope very much that the Committee will report at an early date.
To digress for a moment—my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) referred to this—one rather disturbing feature has emerged as the negotiations for the merger have proceeded. All manner of information about prospects, growth, order books, the cash position—the famous £20 million to which reference has been made—dividend policy, and so on, has emerged. Why was not this information available to shareholders before? Would it have emerged even now if the negotiations had not been going on? No one expects boards of directors to make public information which will help their competitors, but I should have thought that in this case this was information which the shareholders should have had. I hope that, when the Jenkins Committee is considering the duties of directors, it will find time to examine this aspect of the matter.
As has been said by every speaker, I think, the real difficulty is in determining the public interest and how one can measure it. It is generally thought that the concentration of the aircraft industry is in the public interest. Some people have in the past said—the hon. Member for Edmonton said it today—that it might be good for the motor industry to be concentrated, too. I think it not impossible that in tomorrow's debate someone may say the same about shipbuilding. If the process of concentration


were carried through 100 per cent., we should have very large units indeed and there would undoubtedly be an element of monopoly; and yet it might be a very good thing and in the public interest.

Sir C. Osborne: And it might not.

Sir H. Oakshott: It might not, but there is just as good a chance that it would be.

Sir C. Osborne: Does my hon. Friend assume that bigness of itself necessarily means efficiency?

Sir H. Oakshott: No, of course not. I did not imply that at all.
It seems to me that we can try to measure the public interest as it might be affected by mergers in several ways, I have not put them in any order of importance. First, there is the possible effect on the profitability of the new group, a matter in which not only the shareholders but their partner, the Inland Revenue, are very much interested. Secondly, there is the likely effect on the consumer. As hon. Members on both sides have said today, the consumer must not be exploited or held to ransom. Also, the suggestion of my right hon. Friend the Member for Reigate in regard to tariffs is closely relevant here.
Thirdly, there is the likely effect on the people employed in any new grouping. Will the standard of their conditions of employment and labour at least be as good as they were before? As regards the particular merger or possible merger we are now considering, I think that the record of both companies is very good in that respect. Fourthly, there is the matter of research to which reference has already been made. Would a merger avoid duplication? Might not the pooling of resources encourage invention and improve the prospects of some of these industries which are based on these remarkable new discoveries?
Lastly, and probably most important because the interests of the consumer, the interests of the people employed and, indeed, the other factors depend upon it, would a merger increase efficiency of production and, therefore, make the undertaking more competitive? This is really what matters.
Again, it could go either way. The effect might easily be the very opposite

of what the right hon. Member for Battersea, North had in mind when he said that the merger was designed to limit competition. I should take the opposite view. The trend everywhere, whether we like it or not, is for bigger units to be created. Whether we join the Common Market or not, nothing will ever be quite the same again. Competition will be fiercer than ever either way. We have industrial giants in the United States, industrial giants in Europe, and in Russia, too, there is the example of the Russian fertiliser industry, on which I will not expatiate now because I do not wish to take up more time.
We may be forced along this road if we are to compete effectively and expand and extend our markets. I am sure that the Government are right to proceed carefully about this, for it is not inconceivable that a merger like this would "in the light of modern conditions and practices", as the terms of reference of the Jenkins Committee say, be positively in the national interest and in the public interest and not against it.
The right hon. Member for Battersea, North surprised me a little in this context when he said that even if it were proved to be a good thing, then it must be taken over. He did not use the dirty word "nationalise", but talked about "public ownership". This surprised me because I thought that not so long ago he was one of those who had the gravest doubts whether the Labour Party should adhere to this policy.
I do not deny, on the other hand, that in this trend towards larger and larger units, with the attendant risk of monopoly, there is something to which we ought to direct our attention. I am not sure whether a Mergers Court, or whatever one might call it, is the ideal answer. Any machinery which was devised should, as far as possible, work quickly, because as well as guarding the public interest, we must be fair to the parties. Any undue delay might be very damaging, and any machinery devised should work more quickly than the Monopolies Commission has been able to do. Justice and speed do not go easily hand in hand, and, certainly, I do not exclude a tribunal of some sort.
I would commend to the House the extremely thoughtful letter in the


Daily Telegraph on Tuesday of last week from my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), in which he recommended a court before which a concern involved in anything like this would be given the opportunity to seek to establish that a monopoly is not, in fact, against the public interest. There is a lot in this, though I would myself prefer something more like the Restrictive Trade Practices Act in its operation as being rather more appropriate.
In the meantime, there are the review which the President of the Board of Trade is carrying out and the Committee on Company Law. I think that the Government are right to await the results of these. This is not timidity, but just plain common sense. I hope that we shall have these quickly, and I hope, too, that urgent consideration will be given to their findings, for I acknowledge that in view of the growth of this trend towards very large units in industry it may be found desirable for the Government of the day to have at least some powers of regulation.

7.13 p.m.

Mr. Arthur Holt: Towards the end of his speech the hon. Member for Bebington (Sir H. Oakshott) outlined a number of perfectly reasonable questions about the proposed merger of I.C.I. and Courtaulds, but he did not answer them. Many other people have asked these questions. Why, anyhow, should not an attempt be made to answer them before the merger takes place? It does not seem to me that anybody on the Government side has yet answered these questions.
The proposed merger stimulated the President of the Board of Trade in the end to make some examination of it, but in his reference to this today he did not seem to me to give his reasons why the Government had decided not to take any action. He said that the Government were concerned as to whether there were some special circumstances in the I.C.I.-Courtaulds merger which required a change in Government policy. Did he answer to himself satisfactorily some of the questions which have been put to us by the hon. Member for Bebington?
If the Government have satisfied themselves that the merger is, on balance, in the public interest, why cannot they give

us the case for it? All that the President of the Board of Trade said today was that there was a general movement in the economy towards larger size. He said that often in new developments large amounts of capital were required and that these capital developments could not be made in certain industries unless there was already a large accumulation of capital.
I cannot think that that argument is relevant to either I.C.I. or Courtaulds. Courtaulds, the smaller of the two, still has a capital of £200 million, and it is rather inconceivable that any kind of desirable expansion in the man-made fibre industry cannot be carried out by a company which has that amount of capital assets.
I think that the Government cannot, in fact, possibly have been convinced by some reasons which they have not given us that it was in the public interest that this should go on. Monopoly, on the other hand, as we know from experience and from examinations already carried out by the Monopolies Commission, on balance brings with it all kinds of undesirable things, such as restriction of competition and a diminution of choice.
It was very interesting to notice the difference between the speech made by the President of the Board of Trade today and the kind of speeches I remember him making when he was simply the hon. Member for Altrincham and Sale and spoke from more or less the same position as did his right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), who made a passionate speech in favour of free trade which he always refused to me when I made my silly suggestions for cuts in tariffs and he replied to me from the Dispatch Box as Parliamentary Secretary to the Board of Trade. It is very interesting to note the different speeches which people make in different parts of the House.
I want for a few minutes to take the side of the customers. We have heard a great deal about the shareholders. The President of the Board of Trade astonished the whole House when, finally, in defence of no Government action, he said, "Who better than the shareholders of I.C.I. and Courtaulds to


arrive at the right kind of commercial decision?"
This is a perfectly valid argument for a small company battling against widespread competition from other firms, but in the case of a semi-monopoly, with no Government legislation to protect the consumer, it really is not an argument that he ought to use at all as the President of the Board of Trade. It can obviously be possible for the shareholders of Courtaulds to come to a decision which is actually in their favour over the next two or three years. The decision might be to go in with I.C.I. and accept its offer. However, over the next few years that might be also completely against the interests of the customers of both companies, and particularly those of Courtaulds.
I should like to say a word or two about that. It is a matter of great interest in Lancashire, and particularly in my constituency at Bolton. I have here a very excellently produced glossy brochure by one of the large spinning companies in Lancashire, Combined English Mills. In it, attention is drawn to a complete re-equipment done at the Bayley Mill, Bolton, in order to spin man-made fibres up to a staple length of 8 inches. This has cost tens and tens of thousands of pounds. It is interesting to see in a brochure like this the almost dominant position of man-made fibres as distinct from cotton. This firm uses the kind of fibres about which we are talking and which are involved in this merger.
The cotton textile industry—the spinning, weaving and knitting parts—has had a pretty rough time in the last few years, and it is of paramount importance to the industry that it buys its raw material at world prices—and at the cheapest prices, if possible, in the world. Of course, it has not been doing this. It is very interesting to note in one of the letters which Courtaulds sent out—on 17th January—an important and very Liberal sentiment:
Courtaulds are convinced that the manmade fibres industry … can only be competitive if fibre producers are free to buy raw materials in the best market and the textile industry is not limited in its choice of fibres.

Sir C. Osborne: Hear, hear.

Mr. Holt: "Hear, hear" say all of us in Lancashire.

Mr. Denis Howell: And in Lincolnshire, it seems.

Mr. Holt: And in Leicestershire and Nottinghamshire, I suspect, as well, and a few other places.
However, for the whole of the time since the war—and before—it has had high protection for all its man-made fibres. I have taken this up with the Board of Trade until I am almost tired of it. Viscose fibres and nylon are all protected under our import duties by a 20 per cent. tariff plus 9d. lb., but the actual cost of the 9d. makes far more impact on viscose fibres than it actually does on nylon. However, it is a very relevant matter, and it is of interest to note—and other Members of the House may be interested in it even if they are not directly connected with the textile industry—that continental nylon manufacturers have been jumping this large tariff and selling in this country nylon yarn to weavers and spinners at below the price put on by British Nylon Spinners.

Mr. Leo Abse: Is it not a fact that, similarly, British Nylon Spinners has been able to jump the tariff abroad, and is it not characteristic of all large-scale organisations that they are in a position to give surplus products cheaply and that there is no special significance in the point the hon. Member is making?

Mr. Holt: Well, if the hon. Member can come and convince Lancashire spinners or weavers that there is no significance in the fact that they have to pay a duty which carries a tariff of 20 per cent. plus 9d. he is a better man than I am, but I can, as someone involved in the trade, assure him that this is a very material factor.
What we in Lancashire want—and I think that this would go for most of the people concerned who use any of these man-made fibres—is not less competition in this field but more competition, more choice, so that Lancashire has a fair opportunity to rebuild its position on the basis of the new manmade fibres.
A number of people have talked about the value of size and the ability of firms which are very large to carry out adequate research. I do not wish


to dwell on this point for long but I should like just to draw the attention of hon. Members to some of the points which have been brought out in, for instance, the Monopolies Commission's Tyre Report:
It is not always the same manufacturer who shows the lowest profits or the higher costs and vice versa. Nor is it invariably the smaller manufacturer whose costs are higher and profits lower than the larger manufacturer.
The same kind of thing came out in the Report on Semi-Manufactures of Copper:
There is no apparent correlation between the rate of profit achieved and the large size of the concern or the range of products made … although the larger units with a wide range of production tend to achieve rates of profit at or below the average level and some concerns with a limited range of products achieve rates of profit well above average.
Certainly, on this subject of size and whether prices are lower or not, the information is completely inconclusive, and those people like the hon. Member for Edmonton (Mr. Albu) who assume that the car industries of Europe are automatically, when we go into the Common Market, going to amalgamate, and rightly so, into perhaps one firm—this is, as I understand it, his argument—really need to examine the matter. I rather dispute that it has been a good thing for the American nation or for the American car industry that the car manufacturing has come largely in the hands of one large company. I do not think this is at all brought about chiefly by the economics of price but possibly by other reasons, and that is why I very much regret that the Government have not pursued earlier their now avowed intentions of giving some examination to some of these present trends.
There is another point I should like to draw attention to. The argument has been used—I must say I was attracted by it initially—that we are going into the Common Market and firms will automatically become larger and we ourselves should not be at any disadvantage because of it. However, it is interesting to note that the tendency in the countries of the Common Market has been to strengthen their legislation about monopolies. Already the Belgian, Luxembourg and Italian Governments have all taken action. The Belgians, I think, have already put in legislation.

Legislative proposals have already passed the Luxembourg Cabinet and are in draft form before Parliament. The Italian legislation, which is strongest of all, is in draft form and will soon be before Parliament.
I think the reason for this is simply that those countries, as they see the valuable effect of the increased competition in the Common Market, are concerned that their own industries are as bright and effective and competitive as any of the others. The Belgian Government obviously do not want Belgian industries to lose out on this game, and the Belgian Government to be faced with a community which has expenses and, as it were, no industry of its own. It is just an interesting thought to bear in mind and we should be well advised to bear it in mind.
People have talked in a loose fashion about putting our house in order, but I think that one of the things we must do, and very quickly, is to improve our competitive position, to remove things like resale price maintenance, to amend the Restrictive Trade Practices Act, to make price fixing illegal, and, on top of that, to strengthen and improve our legislation affecting mergers and monopolies.

Mr. Jay: Has the hon. Member for Bolton, West (Mr. Holt) also noticed that what is happening in the Common Market countries is that firms are forming joint international subsidiaries which are, in effect, dividing up the markets in the various countries and getting round the anti-monopoly legislation? I think that 600 such subsidiaries have been formed.

Mr. Holt: I agree that the Commission of Brussels will have to take care of that situation which is building up. However, the High Authority of the Coal and Steel Community has been fairly effective in dealing with this problem and, as a result of its comments, more than 100 out of about 200 mergers and amalgamations which have had to be registered have not gone forward. Experience of dealing with these things is growing, but I agree that something more must be done by the Commission of Brussels.
On the longer-term problem, the Government must strengthen the Monopolies


Commission and increase both its membership and its staff. They must arrange that any proposed merger resulting in a monopoly, or which would produce more than one-third of the products of the trade concerned, shall have to submit itself to the Monopolies Commission. That ought also to apply to a firm which is expanding and which, without mergers, reaches the point where it is in danger of producing more than one-third of the products of its trade.
The Monopolies Commission should then examine the case practically, on its merits, to see whether the public interest will allow the merger, or the monopoly. I admit that it is possible that there are good reasons for a merger to be allowed, or a monopoly to continue, but if there are not good reasons the Commission must tell the monopoly or those promoting the merger that it cannot be continued. The actual power should rest with the Board of Trade.
On the present immediate problem, I am sure that the President of the Board of Trade ought to refer both Courtaulds and that part of I.C.I. concerned with man-made fibres to the Monopolies Commission for immediate investigation and ought to advise the companies in the meantime to hold up the merger until the Commission has reported.

7.33 p.m.

Mr. Peter Emery: I want to take up that part of the speech of the hon. Member for Bolton, West (Mr. Holt) when he dealt with the need for more competition in the man-made fibre and textile industries and the need for more choice. What he said was excellent, but he left out the last part of what I would have liked to have been his argument—the need for the consumer to be protected. Little enough has been said today about the position of the consumers of the products of monopolies and oligopolies and duopolies. We have got bogged down in discussing I.C.I. and Courtaulds and Imperial Tobacco and Gallaher. We ought to be considering the long-term problems which have become more and more evident with the working of the legislation since the 1948 Act.
The Motion speaks of complacency and a timid approach. What has happened? In addition to the Socialists'

Act of 1948, in 1953 we passed the Monopolies and Restrictive Practices Commission Act, when the Court was enlarged and powers and functions were given to smaller bodies. That action was considered necessary at the time and was taken in time. In 1956, we had the Restrictive Trades Practices Act, which was applauded by all sections of the Press and which brought in a judicial tribunal and made the collective maintenance of retail prices illegal. That was 'the biggest step forward in thinking along these lines which had been going on in the Conservative Party and in Conservative Party manifestos since the Workers' Charter.
The hon. Member for Bristol, South (Mr. Wilkins) mentioned that. I noticed that he damned all monopolies unless they were public and spoke of the need for taking many monopolies into public control, until it affected something which might be a monopoly in his own constituency. Then he insisted that we should not touch it. He is obviously a wise and clever politician and I can well understand that he has been in his party's whips' office for twelve years. I am sorry that he is not now present, but I am certain that he will not take my remarks amiss.
Since 1956, the Jenkins Committee has been set up and we hope that that will be reporting as soon as possible. There is also the Departmental review announced by my right hon. Friend the President of the Board of Trade. By no stretch of imagination can those actions be considered complacent or timid. It is important to appreciate the logical steps of the alterations achieved by this legislation.
I want here to deal with one of the grave weaknesses of the Monopolies Commission. Since 1948, only 27 cases have bene reported upon. The longest took four years and three months from the time it was referred to the Commission until the report was made—that was in respect of the export and supply of electrical machinery and plant; and the shortest, a sort of quick brew, was on the supply of tea, and took only one year. The average of those times is about two-and-a-half years. I fully appreciate the complexity of these matters and the need for thoroughness in making reports, but in this day and


age no one can say that those times are not too long. Something ought to be done to speed up the inquiries.
It is also significant from its reports that when the Commission has made a detailed comparison of costs within an industry the costs of the largest firms have been the highest, or near the highest, and certainly well above average. I am not saying that that must be immensely significant, but there is something in those facts which needs further study. Since 1958, the Restrictive Trade Practices Court has dealt with about 1,200 operating agreements which have been registered with it. It has not considered all of them, because many have been withdrawn because of parallels with other agreements on which the Court has ruled, and there is no doubt that my hon. Friend the Member for Bebington (Sir H. Oakshott) was right when he spoke of the Court acting as a policeman on the beat.
It is interesting to see what restrictive practices have been condemned, for the pattern is now becoming clear. The loopholes and escape clauses have been severely interpreted. Very few agreements have been held to possess benefits justifying the inherent restrictions within them. Where these restrictions have been endorsed—in transformers and the block, bolt, and nut cases—the court has been careful to specify the precise aspects where these agreements have earned a clean bill of health, and this is immensely important. I believe that this Court has been an immense success. It has created a new attitude about price fixing, and has brought about a greater competitiveness in industry.
Let us also realise, and realise quite seriously, that as certain industries have had to withdraw from their price-fixing arrangements it has been in their joint interests to merge or amalgamate. One of the direct causes of the 1956 Act has been an increase in the number of mergers and agreements to join together.

Mr. Diamond: May I presume to help the hon. Gentleman by saying that I assume he meant "results" and not "causes".

Mr. Emery: I am delighted that the hon. Gentleman has corrected me. I meant to say results. I am sorry that I cannot be as kind to the hon. Gentleman as he has been to me.
What people must realise about these mergers—and this applies particularly to that shareholders of the firms that wish to take advantage of short-term gains—is that the more mergers there are the more these companies are setting themselves up to be taken over by a Socialist Government at some time in the future. It is all very well for the right hon. Member for Battersea, North (Mr. Jay) to talk about the cannibalism of mergers. The greatest witch doctor round the brew pot has been the Socialist Party, and the electorate knows this.
This legislation has brought about a different approach to expansion in industry over the last twelve years. Between 1947 and 1951 expansion was regulated by the previous year's production figures. This system has been swept away, and this has brought about greater competition and expansion.
The removal of import restrictions and tariffs has also had that effect, and one of the condemnations of some of the Socialist thinking on this is that so much of the policy they are pursuing would, in the final analysis, mean reimposing import restrictions, which would lead to less and less competition.
I return to the Restrictive Trade Practices Act with regard to price fixing and price leadership. Now that price fixing has become so outmoded, price leadership is a real danger to competitiveness in industry. What do we mean by this? Joe Bloggs rings up Harry Smith and says, "On the 31st of next month come and have dinner with me. It will be very interesting. Our prices on that day will be increased by 2½ per cent." If, on that same date, Harry Smith sees fit to put his prices up by 2½ per cent., this, according to the law, cannot be interpreted as a restrictive price-fixing agreement.
I do not see how we can legislate for this type of behind-the-counter agreement. I believe that it is impossible to do so, but I hope that as a result of this debate, and with the assistance of the professional bodies in industry, we will create a climate of opinion which will normally condemn such action, and will continue to condemn it at all times, and try to point out the ethical effects it can have on industry and the need for it to be swept away.
In the same way we must realise that there are sections of industry—thank goodness, fewer and fewer—which are much more interested in regulating a share of the market than in competing to get more of it. This applies to some of our biggest corporations. Indeed, only the other day I heard of one large concern approaching a nationalised industry with the idea that because it had lost to another competitor on a tender of considerable size this was wrong, and that the market of the nationalised industry should be shared equally amongst all the competitors in the industry. This is obviously the antithesis of competition.

Mr. R. Gresham Cooke: The Post Office does it.

Mr. Emery: That does not make it right.
Let us also realise that there are firms which say, "Competition is fine so long as we get control, but if we do not get it there is something unfair about the competition". We in this House have to be definite in our approach to such firms. However little they may like it, they must submit themselves to the economic cold draught of competition to bring the benefits to the consumer and not to themselves as shareholders.
In passing, may I put one question to my right hon. Friend the Chief Secretary to the Treasury. It is in relation to the Imperial Tobacco Company and Gallahers. It seems to me that a dangerous principle has been established by the acceptance by the President of the Board of Trade of the guarantees given by the directors of Imperial Tobacco. I am not suggesting that the Board of Trade was not honourable in accepting the guarantees. Nor am I suggesting that the directors were not honourable in giving them. But it seems to me that this might put an intolerable burden of conflict on the shoulders of the directors.
Consider the hypothetical case of Gallahers suddenly finding a chemical compound which will stop any possibility of cancer from smoking cigarettes, and putting this into its cigarettes. If the compound is not available to Imperial Tobacco, it is possible that the sales of Gallahers' cigarettes will skyrocket at the expense of Imperial

Tobacco. The directors of Imperial Tobacco have to consider not only the guarantee that they have given the President of the Board of Trade, but their responsibilities as laid down in detail under the Companies Acts from 1844 to 1948. What will be their position?
I hope that my right hon. Friend will not suggest that this is all covered, because if they go back on this guarantee the Board of Trade will step in. It will step in too late. It will be closing the stable door after the horse has bolted. It is important that this new legal position, which could be brought about in the extreme case, is cleared up for the benefit of all company directors who might be in this position.
I should also like my right hon. Friend to state categorically that in his opinion, and in the opinion of the Government, the parties concerned in monopoly or oligopoly disputes, or take-over decisions, shall not be the judges in their own case. If this is not so the position is likely to get worse rather than better in the future.
I hope that we can have a guarantee that in the consideration given to these matters by the Departmental Committee that has been set up in the Board of Trade, international cartels, as well as the present internal monopoly position, can be examined. Only last week we saw the extension of Lucas, in France, and the possible nucleus for a growth of cartels throughout Europe, which could be very damaging. Hon. Members on both sides of the House would wish to avoid that, and I hope that we can be given a guarantee that the Committee will be able to consider that situation.
Because of the way in which legislation has moved since 1948, it is very difficult to draw lines or to differentiate between the work of the Monopolies Commission and that of the Restrictive Trade Practices Court, in relation to the necessity to consider the problems of mergers. I wonder whether all these matters could be dealt with by one body. There has been too much slow-time working by the Monopolies Commission, and I think that these matters could be dealt with better if they were all referred to one body. It is imperative that such a body should be allowed to


initiate its own inquiries and not have to wait until subjects for inquiry have been referred to it either by the House or by the Board of Trade. It is also essential that it should be able to reinvestigate not necessarily the whole of an industry, but part of it, where and if the occasion arises.
I am thinking specifically of British Oxygen. In most instances, it is in an entirely competitive position, but in some cases, such as in the installation of a medical gas system and a medical vacuum system in a hospital, it is in a complete and utter monopoly position, and can ask whatever it likes. This kind of situation must be made the subject of possible consideration by a body of the kind which I have in mind, without its having to wait for such a matter to be referred to it by the House or the Board of Trade.
It is important that, where amalgamations or mergers are contemplated, such a body should have power to consider these matters. I strongly object to the suggestion that a special committee should be set up to deal with the I.C.I. problem, because unless these matters are dealt with generally we shall be setting a very dangerous precedent.
It seems that in any nation with the stresses and strains of new problems of the kind that appear in the British economy, new situations and new enigmas are bound to appear. What matters is not that these problems should appear, but that the Government, the Conservative Party and the climate of opinion—which is equally important—should be willing to face and deal with them. I believe that the Government are being quite active in trying to deal with this problem, and I hope that some of the suggestions which have been made by hon. Members on both sides of the House will be of assistance in enabling them to deal with this problem quickly and efficiently.

7.55 p.m.

Mr. Robert Edwards: I followed with great interest the admirable speech of the hon. Member for Reading (Mr. Emery). I am sure that my hon. Friends will agree with him in his praise for the work of the Monopolies Commission. He made the most constructive speech we have heard from his side of the House, and most

of his contentions will be accepted by hon. Members on this side.
I was amazed to hear the reference by the President of the Board of Trade to the similarity between mergers in private industry and amalgamations of cooperative societies. This analogy was echoed by the hon. Member for Ilford, South (Mr. Cooper) and the right hon. Member for Reigate (Sir J. Vaughan-Morgan), who made references to amalgamations of co-operative wholesale societies. If we give a little thought to the difference between amalgamations of voluntary co-operative societies and mergers between firms in private industry, we come to the kernel of the issue the House is discussing today.
The hon. Member for Ilford, South talked about the take-over bids of the London Co-operative Society, and the President of the Board of Trade talked about the take-over bids of the Co-operative Wholesale Society. The cooperative movement has 13 million members. It does not matter how many shares each member holds; he has just one vote. Before any kind of amalgamation is considered consultations take place over many months. Meetings of the members are called, the trade union concerned is consulted, as are the employees at every shop, and their whole future is considered. There is a vast difference between this kind of voluntary amalgamation, based on consultation at every level with trade unions and shareholders, and the present take-over bid of I.C.I. for Courtaulds.
I suggest that the President of the Board of Trade and hon. Members opposite have an appalling ignorance of the technique, structure and accountability of the co-operative movement. In the co-operative movement it is a case of one member, one vote. On the other hand, one Belgian shareholder in I.C.I., living in Brussels, holds more votes in I.C.I. than all the workers employed by the company in every factory in this country. He indeed casts a block vote.
The workers in I.C.I. hold nearly 1 million shares in the company, but they have never been consulted to see whether they want to work for a vast monopoly that would bring in Courtaulds. Not at any level does their share capital involve any kind of control over the management or administration


of any I.C.I. factory. At no time have they been consulted although they are shareholders and employees. I presume that power and money will prevail and that I.C.I. will take over Courtaulds, because the Government are doing nothing about it and it will be very difficult for the shareholders of Courtaulds to resist the expanding offers being made by Imperial Chemical Industries.
Courtaulds took over British Celanese, and at Spondon in Derbyshire there is a great centre of chemical production which used to be part of British Celanese. It is not involved only in the manufacture of rayon or man-made nylon fibre. It is a great centre of chemical production where 7,000 workers are employed. My knowledge of this establishment tells me that many thousands of those workers will face redundancy without any "golden handshakes", without any kind of adequate compensation, because much of their work is duplicated at the Billingham factories of I.C.I. and at Wilton and Widnes.
In a previous merger Courtaulds took over a great paint company. If this merger between I.C.I. and Courtaulds comes off, it means that this one company will produce 40 per cent. of the paint and varnishes manufactured in this country. This will be an addition to the whole list of exclusive monopoly products for which I.C.I. is responsible. Indeed, I.C.I. exclusively produces about thirty-nine vital chemicals in this country. There is no competition at all. I.C.I. produces many of these products because it obtained the exclusive patent rights from I.G. Farben of Germany, even when it was controlled by the Nazi industrialists, and as a result of arrangements with the American Du Pont Company.
I.C.I. has the exclusive monopoly for the production of basic materials and elements going into nylon. No other firm produces nylon products in this country. It is the exclusive monopoly of I.C.I., which controls patents which were handed over by the American Du Pont Company. But I.C.I. had to pay a price for this exclusive right, which was that there are certain markets of the world into which I.C.I. products cannot enter. It signed away our rights in many world markets. Does not that make nonsense

of the talk about the necessity to bring I.C.I. and Courtaulds together in order that this country may be able to compete more successfully in world markets?
I.C.I. and Courtaulds were part of a great network of international cartels which achieved world power in chemicals and rayon between the wars. They allocated quotas in all markets of the Western world. The British textile industry, the textile industry in Lancashire, could not buy dyes from abroad because it was informed that the British market belonged to I.C.I. Some Scandinavians thought that I.G. Farben in Germany was charging too much for its dyes and so they applied to buy British dyes. They were informed that this market belonged to I.G. Farben and that Britain could not supply Scandinavian countries with dyes. This is characteristic of what happens when a few business men obtain exclusive control over vast industries. Once they have control of the whole home market they get together with their competitors in other countries to form international cartels which eliminate competition, not merely in their own country but in the Western world.
By so doing they keep prices exorbitantly high, and, because there is no competition, they keep the world poor as a consequence—or poorer than otherwise it would be. It is our contention, and surely it is a fair contention, that the workers, the employees, the scientists and the technicians, whose daily bread depends on stable production in I.C.I. and Courtaulds, should be considered and consulted in this take-over bid.
What protection have such people? Only the protection of this House. To whom do they appeal for protection if not to the Government? If the Government are not prepared to protect the workers whose whole future is uncertain, then the Government are betraying the people of the country, and the industrial workers. Frequent references have been made to the Conservative Industrial Charter during this debate, but that would become a mockery and a piece of hypocrisy. The Conservatives do not mean what they say at election times if they are not prepared to take some action to defend the interests of the industrial workers, the technicians and the research workers.
In this debate we are not merely dealing with the I.C.I. and Courtaulds. We are discussing the whole tendency towards monopoly and industrial concentration in our country. It is an appalling fact that this House has to discuss this vast subject, involving the future of our country, without knowing the facts. Nobody can tell us the facts relating to the industrial tendencies in Britain. We do not, as a Government, collect the facts. I tried to get some information from the Treasury about American capital investment in British industry. The Treasury could not tell me. Nobody knew, they could only guess. I could get the information from American sources, but not from the British Government. The Treasury did not know to what extent American monopolies had penetrated into our country.
Today there are 150 American companies operating in the British economy and they are all an extension in Britain of huge American trusts and are still controlled by American shareholders. We do not have the information, which we ought to have, on which to base our policy regarding the future of our country. We can base our policy only on the census report of 1935. Nothing has been done since then to analyse the extent of monopoly development throughout the British economy, apart from a few reports from the Monopolies and Restrictive Practices Commission.
It is my view that our country is more highly monopolised and more highly cartelised than any other country in the Western world. It is my view that a few business men have more control over the vital resources of our land than is the case in any other country, including the United States.

Mr. Callaghan: More than we have.

Mr. Edwards: Yes, more than we have. It was proved many years ago by the census report that the three largest units controlled 60 per cent. or more of the total production in each of ninety of our basic industries. That is a dreadful state of affairs which reduces competition 10 a farce.
It reduces democracy to a farce because it means that a few business men behind the closed doors of a board room can plan the whole pattern of our industrial society. They can plan the pattern of agriculture and sabotage science

if it is not profitable to them. They can restrict production and maintain high prices in order to increase their profits without any kind of accountability at all. Even in the most dispersed industry in the land, the building industry, where there are 160,000 firms, four firms employ 33 per cent. of the labour force. In the building materials section of the industry, fifty-one firms control 80 per cent. of building materials supplies.
Time is passing and other hon. Members wish to take part in this discussion. Although I am arguing about monopolies, I do not want to be charged with being a monopolist of the limited time of the House. We have reached a stage in industrial concentration that is of the utmost danger, not merely to the economic future of the country, but to the principle of democracy itself. One of the reasons why hundreds of thousands of people, who ought to know better, are losing faith in British democracy and losing faith in Parliament is that great economic decisions affecting the future of our country are made outside Parliament, not merely in the board rooms of British industry, but in the board rooms in Paris, New York and Brussels. There has to be more accountability in British industry if we are to maintain a really healthy democracy in this land.
It is a disgraceful decision of the Government to refuse to halt this attempt of one huge industrial concentration to take over another huge industrial concentration, which would put unprecedented power into the hands of about fifty businessmen. It is a disgraceful betrayal of the interests of this country and a betrayal of democratic practices for the Government to refuse to have the inquiry which the Motion demands.

8.14 p.m.

Sir John Barlow: The hon. Member for Bilston (Mr. R. Edwards) will forgive me if I do not take up the points he made, but there is very little time at our disposal and several hon. Members, on both sides of the House, wish to make valuable contributions. I have much which I could, and should like to, say, but I hope that the hon. Member who


follows me will confine himself, if possible, to about the same time as I take up.
It might be advisable to declare a partial interest in this matter. I am a director of a concern called the Calico Printers' Association, which discovered Terylene. The Association did not feel it advisable to develop it itself, so it sold the rights to I.C.I., which developed the product very well indeed. My company still draws substantial royalties which, unfortunately, will come to an end in a short time. So far as I can see, whether this great amalgamation between I.C.I. and Courtaulds takes place or not, it will not affect me personally at all.
Take-over bids are nothing new in industry. They have been criticised very much during the last ten years. Some have been good, some have been bad and some have been indifferent, but the take-over bid is something which we have had to live with and get used to. The present proposition of I.C.I. to take over Courtaulds is something entirely new in this sphere. Hitherto, larger take-overs by property companies did not savour at all of monopolistic characteristics because there is so much property of different sorts in the country, but this proposed merger, so far as I can discover, is something entirely new.
Each is a great monopoly in itself. Each might well be passed over to the Monopolies Commission to be investigated. It might be a very good thing if that were done. I.C.I. has done a tremendous amount of research work in many fields. It has not been successful in discovering new man-made fibres, but it has developed a man-made fibre extraordinarily well. Courtaulds has been successful in research work. It has discovered and developed several valuable man-made fibres.
Whether central research would be an asset, I have doubts. If we have in a great organisation a large research department running on the same general lines probably many things are missed. It is probably much safer for research to be done by several different communities or stations. They are much more likely not to miss some valuable discoveries. Take-over bids have been with us and will continue to be with us, but the Government should face the fact

that this proposition is unique. Suppose, for example, that the Big Five banks said that they would join together. I have no doubt that they could make much more money collectively than individually, but surely the Government would have something to say about it. In pre-war days the Government indicated that they thought amalgamation of the banks had gone far enough. This is a new issue we have never had to face. It should be carefully considered by the Government before it goes through.
It is all very well to say that a Departmental committee is considering these matters. The President of the Board of Trade has told us that that committee will probably report towards the end of the year. It will probably take a further six months for the Government to make up their mind, and we do not know what may happen in the intervening eighteen months. It is far too dangerous to leave this matter to the future recommendations of a Departmental committee. It is so important that if this opportunity is lost the Government will regret not having considered the problem now.
The production of man-made fibres in this country up to the present has been approximately 83 per cent. by Courttaulds and 13 per cent. by I.C.I. It has been suggested that if we go into the Common Market we ought to have one gigantic monopoly because it could cope with the situation in a much better way. If there is to be any take-over, surely it would be much better for Courtaulds to take over the man-made fibre section of I.C.I. If I.C.I. goes through with its proposition it will have an almost complete monopoly of man-made fibres. It could easily have a complete monopoly in paint and fertilisers. Where is it to stop? It may be the right thing. I am not saying that it is not. But I want an opportunity to think the matter out very carefully, and an opportunity for the Government and the people to decide where we are going before it is too late.
It has been said that a large combine of the proposed kind is necessary to compete with America and with the Continent. I am informed that already production by Courtaulds and its subsidiaries is 20 per cent. more than that of Du Pont, in America, and a similar amount above the largest continental


firm, so that the argument that we must have these amalgamations in order to be competitive and to go into the Common Market does not hold water.
I am very disappointed with what the President of the Board of Trade said today. This is a very important matter, and I feel that unless the Chief Secretary to the Treasury is very reassuring in his speech I shall find it very difficult to vote with the Government.

8.21 p m.

Mr. Denis Howell: The hon. Member for Middleton and Prestwich (Sir J. Barlow) has made a very courageous speech, and I am sure that he will not mind if I do not follow his arguments, not least because he had the audacity to instruct the next speaker, who happens to be me, not to take longer than he himself took. I will, therefore, proceed at once to the question of non-ferrous metals, a question which has not been mentioned in the debate today.
The House will recall that some time before Christmas I attempted to put down some Private Notice Questions on the subject, and I also attempted to move the Adjournment of the House on the subject. I have no doubt at all that Mr. Speaker was right in stopping me from putting my Questions, and the House was probably right in not acceding to my request for the Adjournment, but it is rather serious when the House is prevented from discussing the state of British industry and when, even in a question which does not compare in magnitude with the proposed take-over in the chemical industry, we are precluded from discussing matters which are vital to the interests of many thousands of workpeople and, in respect of non-ferrous metals, in which our industrial potential is involved.
The best service that I can do will be briefly to give the facts of the case in which I am concerned, because I think that they ought to be on the record. Guest Keen and Nettlefold is a very large group which for a long time has had a monopoly interest in the manufacture of steel screws. The group also has a subsidiary called United Non-Ferrous Metals, which manufactures brass rod and brass wire. Delta

Metal until a few years ago was a comparatively small company manufacturing brass rod, brass screws, brass strip and brass wire. There was then some new ownership of the company and an accountant came on to the board. I hope that my hon. Friend the Member for Gloucester (Mr. Diamond) will not mind my saying that once accountants get into positions of considerable authority, great difficulties seem automatically to flow from that fact. This certainly happened in the case of Delta.
While nobody has been looking, and in the last three years Delta has taken over eighteen firms, all engaged in this or ancillary fields. I have here a list of all these companies, and I intended to read them, to put them on the record and to give a little dissertation about each, but in view of the time I will not do so, and I will ask the House to accept it from me that in the last three years Delta has taken over eighteen firms and has now virtually cornered the market. There was, however, one firm, which manufactured brass screws, by the name of Davis and Timmins, and on two or three occasions the share market had indicated that Delta, which as everybody knows wants to take over more and more companies, was casting its eye on Davis and Timmins. After a certain time this takeover took place; in August of last year Delta Metal took over Davis and Timmins.
I have no doubt that this was a matter of concern to the United Non-Ferrous Metals Company, which, I understand, supplies most of its brass rods to Davis and Timmins. When Davis and Timmins had been taken over, obviously this business would automatically be transferred to the Delta Metal Company. It was also a matter of concern to people employed in the industry, particularly those in the scrap trade, which is a very important matter in brass manufacture, and perturbation was expressed in industrial circles.
Within four months of Davis and Timmins having been taken over, the board of Guest Keen and Nettlefold and the board of Delta Metal have come together and have decided to do a swap of subsidiaries. The United Non-Ferrous Metals Company will go to the Delta group, thus giving Delta a virtual


monopoly in the manufacture of brass rod and brass strip, and Davis and Timmins, manufacturing brass screws, will go to the Guest Keen and Nettlefold group, thus giving that group not only a monopoly in steel screws but also a virtual monopoly in brass screws.
This cannot be in the public interest. When I looked into the matter I discovered that the number of competitors to Delta, for example, is extremely limited. There is I.C.I. Metal—and I am glad to say a good word for I.C.I. at this moment, for not much has been said for I.C.I. so far in the debate—and this company had announced that it will reorganise its metals interests and will compete. One hopes that something will flow from that. But a large firm called McKechnie Bros. already has ties with the Delta Metal group through South African interests. There are two other companies, one of which is Vickers Armstrong, and the other is a very small company indeed, Muntz.
The traders are extremely worried, particularly the scrap metal traders, because they know that the result of this and of the extremely tough policy which Delta follows will be that the whole of the trade in brass rods in the country will virtually be in the hands of Delta, which company has already been following a very tough line. There is a danger of it saying to people, "We intend not only to supply you with brass rods at prices which suit us but to insist on taking the scrap back from you at prices which also suit us". The price of scrap is a material factor because 60 per cent. of brass rod is made from scrap.
It is interesting to note that until now the price of scrap has been dominated by the London Exchange. If this new amalgamation takes place, that dominating factor and the fixing of the price of scrap metal will virtually disappear from the London Exchange and will be in the hands of the Delta Metal group. It is an interesting but sad commentary that although the price of brass scrap fluctuates from day to day, and the traders tell me that they have to have regard to the London Metal Market in this connection, the price of the finished commodity, brass rod, hardly ever fluctuates. That is the situation notwithstanding the

importance of scrap metal in the commodity. Obviously something is very wrong. There is also a 10 per cent. import duty in respect of brass rods and there is no export from this country of scrap metal, which means that this industry is in a very peculiar and highly concentrated state.
One is bound to ask a question, are the metal merchants of this country right to be extremely alarmed about their future? But one may also ask the question, where does the consumer come in all this? This is a common question which we have been asking all day without getting much of an answer. Where does the consumer come in? It is clear that in the production and sale of nonferrous metals the consumer has a very small place. A production team went from this country to America quite recently to look at the situation and marketing of non-ferrous metals there, and on their return the members of the team reported that the whole of the price structure of the non-ferrous metals industry in this country should be changed.
In this country, one pays the same prices for one's brass whether buying a tremendously large quantity or a very small quantity. The basic price per lb. does not change. The production team that went to America said that in America the price varied, and if one bought a large quantity one got the benefit of a big sale, and if one bought a small quantity one obviously paid much more. This policy does not apply here.
There are same very interesting sidelights to all this. There was an organisation called the High Conductivity Copper Association. I understand that this means that it produces copper which does not conduct electricity.

Mr. Albu: No, it is the other way round.

Mr. Howell: It is the other way round? I am obliged to my hon. Friend the Member for Edmonton (Mr. Albu). The point is that this association was disbanded, and this has now led to the practice which the hon. Member for Reading (Mr. Emery) mentioned. This is the question of price leadership, which is the new racket operating throughout British industry, and about which, so far as I can find out from my small researches, the Government have not had a


word to say on any conceivable occasion. In non-ferrous metals, aluminium sheets, brass rods, copper tubes and brass strip, where the practice of price leadership now operates automatically, customers are told that as from a certain date the price will be increased by so much, thus effectively and entirely eliminating any competition.
I should like to say a word about aluminium sheets. After I had raised this matter in the House, I got into touch with a man representing a very reputable firm in this country, who told me that he entirely agreed with what I was saying. He was involved in nonferrous metals, and he said that he himself had had 12 to 14 meetings with the Registrar of the Restrictive Practices Court to try to get the matter brought before the court and something done about it. He was a believer in healthy competition, but he was rather despondent as a result of his experience.
I will tell the House one of the things he did in his firm. If the President of the Board of Trade would like to see these particulars, he has given me authority to pass them on to the right hon. Gentleman, though, obviously, not to disclose them publicly. He wished to try to break the racket in aluminium—where the whole thing was price fixed—by importing it from the Continent.
The result was that the Delta Metal Company, having acquired one of the eighteen companies and having an interest in aluminium sheet, said to him quite blatantly "If you continue to import aluminium sheet into this country, you will cease to get the discount we are now giving you on certain commodities you buy from us." He replied "I am not going to tolerate that threat. I shall continue to import aluminium sheet." He is still importing it, but from that day to this he has never received the discount which he formerly got from the Delta Metal Company. This seems to me a very serious matter that needs to be examined. It seems to me that in non-ferrous metals we are having increasing monopoly, with complete disregard for the rest of British industry.
There is also the position of the work-people involved. My hon. Friend the Member for Bilston (Mr. R. Edwards) dealt with that admirably earlier on. It happened that people in these eighteen

companies taken over by the Delta Company were getting in touch with me. One gentleman wrote me a letter in which he said that the last time they were taken over all the executives got the sack, and his wife suffered a nervous breakdown, as one can well understand, because of his uncertainty about the future, with his mortgage commitments and so on. Now that another merger is projected, I ask the Board of Trade to look at it, because this gentleman, having thought he had got himself into a more favourable position, now finds himself facing the same position again.
The last time it happened to him, he went to see the managing director of the firm being taken over and told him that there was considerable perturbation among the workpeople, and especially among the executives, about their situation. Two days later, the chairman walked on to the platform in the canteen, having called a meeting, seconded by his lieutenant, and said he was extremely sorry to hear that the work-people were concerned about the position and that there was no need for anybody to worry. He said that nobody would be dismissed. He said "We are a Christian company, and believe that we are all entitled to a living, and we as Christians will see that you get it." That chairman meant what he said, but he had been taken over, and the result was that although he thought the work-people would be well looked after, he, the man who had complained, and all the other executives found themselves on three months' notice within a few days. This is a very serious state of affairs.
Other hon. Members want to speak. I hope I have not taken up too much time. I have tried to concentrate what I have to say into a few minutes. I end as I began. It is extremely important that we ask ourselves two questions. First, where does the public interest lie? Much has been said about the position of the Labour Party. There is a great deal of difference between public monopolies and private monopolies. Hon. Members opposite, who came to power eleven years ago and inherited six public monopolies from the Labour Party, have done nothing to disturb them, which is a factor which should weigh in their minds, for many reasons. When an industry is a monopoly, if it


is to be carried on under the existing management there certainly ought to be a great degree of public accountability. The case for public accountability has been overwhelmingly established today.
The second question concerns democracy. The British public has a right to know that the natural resources in raw materials and labour of this country are being utilised for the benefit of the nation as a whole. I end with one last hope, that one of the byproducts of all this will be that the House will look at its antiquated procedure which prevents Members of Parliament delving into these matters, asking questions, or raising the subject until there has been a fait accompli. This is a shocking procedure to operate in the British Parliament in 1962. I hope that this is only the first of many searching debates the House will have into the state of British industry, because they are very much needed and there is a tremendous amount of public concern about these matters.

8.37 p.m.

Sir Cyril Osborne: I do not like monopolies.

Mr. Callaghan: A short speech, please.

Sir C. Osborne: I do not like monopolies, and I do not like being interrupted by someone who is guaranteed half an hour. If we are to have monopolies, they should be public monopolies which are accountable to the country. In this issue the public interest should override everything else.
I want to bring the discussion back to what I think is the main issue, namely, the I.C.I. grab to take over Courtaulds. I have three personal interests which I must disclose. First, I have been a director of two textile companies for over twenty years and we have bought Courtaulds' yarns for that period and are satisfied customers. Secondly, I have an equal interest, as far as I can make out, in both I.C.I. and Courtaulds' shares. Thirdly, and most important, the latest Courtauld factory was built in my constituency especially to produce Courtelle, the latest and finest man-made fibre. I do not want to risk that factory being

closed down. I do not want to risk my constituents losing their jobs by becoming tiny cogs in the huge I.C.I. merger. I think that I am entitled to speak on their behalf.
I ask my hon. Friend the Minister of State to ask his seniors to look at the position again, because the Government have an obligation to the workers and to the nation not to permit this merger to go through until we are all convinced that it is not against the public interest. I do not think that we Conservatives, who always say that we believe in free enterprise capitalism, can possibly accept a private monopoly. The two things cannot be reconciled. Capitalism is only justified if there is adequate competition which brings down prices. Without that I do not see how we can, in this modern world, justify our faith and our way of life. I cannot understand why a Conservative President of the Board of Trade has refused to investigate a merger that will affect so many people in Britain, and I hope that he will look at the whole matter again.
I wish that both the President of the Board of Trade and the Chancellor were here because I should like them to hear my remarks. The case against the merger can be summed up in this way. Courtaulds has publicly accused I.C.I. on three important issues, to which I.C.I. has made no reply whatever. Firstly, Courtaulds has said that I.C.I. is charging for Acrylonitrile—the raw material for Courtelle, which is made in my constituency—double the price at which Courtaulds can now buy it both from America and Europe.
If this is true, then I.C.I., if the merger goes through, will have a monopoly of raw materials and will be able to charge just what it likes and British customers will have to pay higher prices for the goods which they themselves make.[Interruption.] For goodness' sake, be quiet. Such a position would be contrary to the public interest.
Secondly, Courtaulds has said that for caustic soda, a base material used in the making of rayon, between 1951 and 1961 I.C.I.'s prices rose by 50 per cent. whereas Continental prices in the same years dropped by 10 per cent. Is this true? We should be told the facts, and if I were the President of the Board of Trade it would not take me three years


but half-an-hour to find them out. I should have both the top directors concerned in my office facing each other across the table and get the truth within a very short time.
Thirdly, Courtaulds has said—and this is the worst accusation it has made—that for chlorine, another base material, I.C.I. prices are 65 per cent. higher than German prices. Because of the competition that has been brought about since I.C I. and Courtaulds rather parted company, I.C.I. has dropped its prices, but they are still 30 per cent. higher than German prices.
These are very serious charges and I do not know if they are true. They may not be, but hon. Members should know the facts. If they are true it would be scandalous to let this merger go through. In the interests of the country the Government must think again, get the facts and bring them before the House, for hon. Members are entitled to know. If the merger goes through it is not so much that the supply of the various man-made fibres will be controlled by one hand but that the supply of raw materials will be controlled.
The Government are continually saying to those of us engaged in manufacturing that we must export more, but we need cheaper raw materials to do this. If I.C.I.'s activities will make our raw materials dearer it will be more difficult for us to sell abroad, and, therefore, if the facts are as Courtaulds has related them, the merger will act as a restraint on trade and against the public interest and should be stopped.
I hope I may use this language, but to me it looks like the old American nineteenth century take-over bids that Vanderbelt and Rockefeller engaged in fifty or sixty years ago. The American Government stopped that. Why should we not do likewise? I beg the Government to look at this again. It makes Courtaulds, with that company's immense "know-how" and experience in the production of raw materials, just a tied house to I.C.I., for Courtaulds must take I.C.I.'s raw materials at any price I.C.I. cares to charge.
I have one other much more serious point to put to the Minister, and this directly concerns the Chancellor. If the President of the Board of Trade allows

this merger to go through without further investigation, without satisfying himself beyond a shadow of doubt that it is in the public interest, he will be sabotaging the Government's most important economic policy—the pay pause.
On this issue the Grimsby Evening Telegraph said something that has not yet been said in this debate. It said on Friday last:
Six hundred employees at Courtaulds Humber Bank factory"—
which is in my constituency—
are to press for a substantial increase ' in their basic wages. This claim is understood to be a direct result of Courtaulds' forecast that profits would leap by £11,000,000 by 1964–65.
The article goes on:
Two weeks ago Courtaulds forecast its profits would leap by £11,000,000 by 1964–65 in a financial statement to stockholders on current and future prospects—the first big blast by the company to I.C.I.'s take-over bid.
Let my hon. Friend bear in mind the following:
The men claim that the firm is in a 'very healthy position', and if there is all this money about 'it is about time our basic wages were increased'.
I do not blame my constituents for putting their plate out if they think that there is a lot of "lolly" going round—[HON. MEMBERS: "Hear, hear."] If I were one of them, I too, would put it out. Hon. Members opposite say, "Hear, hear", but let me put the other side. I.C.I. has announced that its profits for 1961 show a reduction of £26 million, but the workers, in the same trade unions, have not dashed off to the firm saying, "Your profits are down so we want our wages down, too". It only seems to cut one way.
That wage demand would not have been sparked off had it not been for the extravagant forecasts that Courtaulds has been compelled to make in order to rebut I.C.I.'s take-over bid. That is completely contrary to both the public interest and the Chancellor's policy. If the President of the Board of Trade really wants to ruin the Chancellor's wage-pause policy he is going the best way about it by standing on one side and washing his hands of the whole affair.
This is the crucial matter, because I believe that unless we have a pay pause—and a dividend pause as well; a pause all the way round—there is no hope of


our selling enough abroad to pay for our basic requirements of raw materials and foodstuffs. This is the important issue, and by standing on one side, the President of the Board of Trade is doing the Government and the country a great disservice.
It is not good managerial policy for a board to scrape the barrel, as it were, put everything in the shop window, and promise and promise. Wise directorships keep as much up their sleeves as they can for a rainy day. To be forced, as I.C.I. has forced Courtaulds, to make what I believe to be extravagant claims for future profits is bad for us all.
The Government ought not to leave it to the shareholders to decide what is best in the national interest. It is unfair to shareholders to put that burden on them. That decision ought to be made by the Government. It is wrong to put it on the widows and little people in the country—the country doctor, the country lawyer—[HON. MEMBERS: "The insurance companies."] No. the insurance companies have not the votes to carry the business. It is the relatively small investors—about 200,000 of them, I suppose—who will decide, and it is unfair to put on their shoulders the decision of whether or not it is in the best interests of the country. Nor should niceties of Stock Exchange calculations decide whether or not the merger takes place; it should be a direct Government decision.
I am astonished that I.C.I. should have—if I may use the word—the impudence to make this bid when last year its profits dropped by £26 million. I should have thought that its directors had plenty to do to pull their own company round before trying to swallow one of their competitors. I therefore hope that the Government will look at the whole matter once again and decide to hold an inquiry.
In "United for Peace and Progress", which was our General Election manifesto for 1955, under the heading "Competitive Enterprise", we said, and I should like the Government to stick to it:
We reaffirm our belief in the system of free competitive enterprise. The Conservative Party is strongly opposed to any further measure of nationalisation. We are equally anxious that private enterprise should be free

from any reproach of harmful restrictive practices. Many of these practices, on both sides of industry, are relics of the past, quite out of place today … Our policy is to obtain an impartial statement of the facts and their effect upon the national interest, and then to take the action appropriate in each case.
This, I think, the President of the Board of Trade has failed to do. I beg my hon. Friend to put it in front of him in the strongest possible terms, asking him to think again, and to think purely in the national interest.

8.51 p.m.

Mr. Leo Abse: I am glad to have the opportunity of being able to say a few words, because I am well aware of the profound concern among the 6,000 employees in my constituency where British Nylon Spinners is situated. That industry is jointly owned by both Courtaulds and I.C.I. Now, with dismay amongst all, and disgust amongst many of my constituents, they find themselves booted around as a football, buried amidst a scrum of undignified and brawling directorates battling for personal power, shareholders' profits and capital gains. The dismay is all the greater because Pontypool knows B.N.S. to be a splendid success. It was constructed in this unlikely spot because of wise Government pressure during the time that Labour was in power, and it has triumphed as a consequence of a long co-operative effort by management and men in which all who have participated take pride. I think that it is as well for us to understand that it is a success because there are certain conclusions one can draw from it.
From an initial capital investment of £8 million its net assets have now grown to nearly £42 million. Profits have mounted dramatically. It commenced in the 1950s with £3·3 million profits. In 1960, the profits were £11·5 million, after depreciation of £2 million, and after spending millions on research. Nor, I should say in fairness, has it squandered all its profits on shareholders. The B.N.S. works at Gloucester have been extended, and, with extensions in Australia, it would be fair to say that this company has ploughed back its resources to finance expansion and innovation.
The first obvious lesson to be learned from all this is that British Nylon Spinners is a triumph of vertical integration. Its complete dependence upon


I. C. I. polymers has, in my opinion, demonstrably in no way inhibited its development. The contrary is true. I.C.I. has determinedly endeavoured to marry up with the increasing and indeed voracious demands of Pontypool for greater quantities of polymers, and to suggest or imply that I.C.I. is necessarily a dead hand upon the man-made fibre industry is to talk palpable nonsense.
It is equally quite remote, in my view, from reality to suggest that the manmade fibre industry would necessarily be neglected because of disinterest on the part of the chemical industry when it is clear that I.C.I. has today a far greater capital investment in polymer plant than in B.N.S.
I have not the time to expand my theme, but one must recognise what has happened at Pontypool and then recognise similar trends which are going on throughout Europe. In Germany, Bayer and Hoechst, two big chemical industries, are entering the spinning field. In Italy, too, Montecatini is moving with great verve from the heavy chemical industry into fibres. In the United States also the fibre industry is vertically integrated with the big chemical industry in both the Monsanto-Chemstrand organisation and the gargantuan Du Pont organisation. Wherever one looks, one sees that the trend is towards a vertically integrated industry within which the chemical manufacturers and fibre manufacturers are coming closer together. My conclusion, although I have no time to demonstrate the reasons, is that this is an inevitable trend in the man-made fibre industry and that there will be more and more integration between chemicals and spinning.
In my view, it would be folly, therefore, if the House were to take a didactic or dogmatic stand on this issue and say that it is impossible and wrong for the two sides of industry to be integrated. If one reaches this conclusion and begins to believe that this type of integration is necessary, this is only because it is an inevitable economic trend which no amount of shouting or dismay will stop. After all, what we are witnessing now is what Marx prognosticated many years ago. Although it is

fashionable nowadays to point out how Marx was wrong, this is one issue on which he was demonstrably right.
Large integrated industries are developing throughout the world. If we are to go into the Common Market, the domestic man-made fibre industries of this country will have to meet the whole power of Du Pont, based as it will be upon Europe, poised as it is for a vast expansion. Faced with these facts, we must realise that there can be no putting back of the clock. We must not imagine that we can go back to the 19th century and have a large number of small competing units. It would be folly to try.
As Socialists, we are in no dilemma here. It is hon. and right hon. Members opposite who are in a dilemma. Confronted with the facts, they fiddle-diddle, not knowing what to do, until, like this Government, they are utterly inhibited from doing anything at all. If I have one contribution to make to this discussion it is this. Confronted as we are with present developments, with the inevitable growth of vertically integrated industries and with the power of foreign competition which we shall have to meet if we enter the Common Market, it is high time for us to consider having a public sector vertically integrated within the chemical industry. Why cannot we have two I. C. I. s, one of them publicly owned? This is the type of approach which we who are Socialists are not inhibited from taking, and, moreover, I believe that it is something which, on empirical grounds, would suit the environment of this country.
I sincerely hope, therefore, that we shall not pretend that Courtaulds is a little David fighting the big Goliath. The House should not try to anthropomorphise the whole issue but should be realistic and recognise what are the inevitable trends and try to lead. I urge the Government to change their ways and not abdicate their responsibilities. Thinking always of the workers whom I and other hon. Members represent, I ask them to say that, in the national interest, there should be an inquiry. In my judgment, an inquiry would lead to the conclusion, first, that it is inevitable that there will be integration and, second, that the public interest will demand that at least one sector of industry must be publicly owned and controlled. We as


Socialists can say that. The great dilemma of the Tories at this time is that, having maintained their philosophy and believing in competition, they find that economic forces are completely sabotaging their beliefs. They are trapped by their own outmoded and out-of-date ideas.
For those reasons, I readily support the demand for an inquiry.

8.59 p.m.

Mr. James Callaghan: I should like the hon. Member for Louth (Sir C. Osborne), who has now left the Chamber, to know that I agreed with all his speech. I am sorry that Ministers were not here to listen to it. If the hon. Member should think that I was interrupting him unnecessarily, I ought to say that I appreciate my good fortune in being the last but one speaker in a debate like this and having a fixed amount of time to speak, and that the only reason I asked the hon. Member to make his speech shorter than his speeches usually are was that I was anxious that the voice of workers at the British Nylon Spinners factory in Pontypool should also be heard in the debate. I am very glad that my hon. Friend the Member for Pontypool (Mr. Abse) has now had the opportunity to speak.
I should like just to make one personal reference. Yesterday, a great friend of many of us in this House died. It is in Pontypool that one of the fruits of his work is to be found. All of us in South Wales are very conscious of the debt that we owe to Hugh Dalton. The British Nylon Spinners factory is a living monument—among many others—to his work for the people, for it is well known that if he had not insisted on its going to Pontypool it would have gone to the Midlands. Everyone in South Wales is very conscious of this.
I was invited by the President of the Board of Trade to say whether my hon. Friends and I thought that the I. C. I. Courtaulds merger was of such a size—"take-over" is probably the better term—that, by the very nature of the size of the proposal, there should be a public inquiry. My answer to that is, unhesitatingly, "Yes". Of course it is. When we consider the magnitude, the importance and the capital assets of I.C.I. and

Courtaulds, they stand out in any sense as something of the first magnitude and first importance to this country.
Since the President of the Board of Trade asked me that, I have been looking at employment in private industry. Apart from Unilever, there is no other private company in Britain today which begins to stand comparison in terms of the number of employees with I.C.I., and certainly even less in the event of an I.C.I.-Courtaulds merger. The nearest to it—Unilever is bigger—is HawkerSiddeley, with 122,000 employees, and even giants like English Electric, with 80,000, Tube Investments, with 70,000, and Dunlop Rubber, with 95,000, are only half the size of I.C.I. in terms of numbers of employees.
What about the capital employed? As far as I can see, there is only one private company in the country, Dutch Shell, which has a larger amount of capital assets than I.C.I.-Courtauld. The capital assets of the new merger will be larger than those of the whole of the National Coal Board, not as large as those of British Railways, much larger than those of the gas industry and not as large as those of the nationalised electricity undertaking.
We are dealing in the House today with one of the great giants of British industry, and all that the President of the Board of Trade can tell us is that he proposes to leave the future of the industry to the shareholders. I tell him that there is a basic difference between us. We do not believe that such a decision should be left to the shareholders; no more do a number of his hon. Friends, and it is a great pity that he missed some of the speeches that have been made during part of the evening.
The merger is of importance from many points of view: from the point of view of our exports—at least £50 million a year; from the point of view of the home users, which has been put by a number of speakers in the debate; from the point of views of the workers in the industry; from the point of view of the consumers; from the point of view of maintaining British technical progress; from the point of view of the proper use of our capital resources—from all these points of view. Yet the Government are proposing to leave it to the offer that I.C.I.


can make to the shareholders of Courtaulds, together with the counteroffer that Courtaulds makes to its shareholders. I tell the President of the Board of Trade that I regard it as frivolous on his part that he should deal with a great industry in this way.
Only the shareholders are to take the decision. They are not to decide the future of this great industry, one of the mammoth industries of the country, on the basis of which of the alternatives is likely to provide the exports which the hon. Baronet the Member for Eye (Sir H. Harrison) wants. Throughout the whole of his speech he talked to us about the export needs of the country. We were very glad to hear the hon. Gentleman again after so long a silence, but does he really believe that the shareholders of Courtaulds will decide on this counter-offer this evening on the basis of exports?

Mrs. White: Cash.

Mr. Callaghan: Will they decide it on the basis of the expected techniques and progress in the industry? Of course not. They will decide it on the basis of whether an amount of cash quickly taken now, selling out and reinvesting in some other industry before a capital gains tax is introduced in the Budget, will serve them best.
This is the way in which, the President of the Board of Trade tells us, the future of this industry is to be decided, by reference to no technical considerations, no considerations of public interest at all. Rarely has there been a more complete condemnation out of the Government's own mouth of the threadbare nature of contemporary capitalism.
The only people so far who have made any reference to the public interest in this dispute are the boards of the two companies, because the Government obviously are not interested in it. They are not even interested in it enough to have any sort of inquiry as to whether the public interest will be affected. The two boards, apparently more conscious of their responsibilities than the President of the Board of Trade is conscious of his, when they come to look at the national interest, disagree about it. They take different views about it.
I.C.I. says that the merger will be in the interests of the users of man-made fibres. Courtaulds disagrees. So, also, do the users themselves. I refer to a letter by Sir Ernest Goodale. I thought that a quotation from him might have been used many times in the House today, but there has not been one yet, so I can pick up a new one. He wrote in The Times of 23rd January that
in our view the interests of the users of man-made fibres are best served by their having a choice of supplier, and as a consequence we share the philosophy of Courtaulds rather than that of I.C.I.
So I.C.I. and Courtaulds, when considering the national interest, are in flat contradiction with each other as to what is best both for the users of man-made fibres and the national interest. I.C.I. believes that the merger would assist exports. It took a full page in The Times to tell us so. Courtaulds says, on the contrary, that it will subordinate man-made fibres exports to the needs of the chemical industry and that exports will be jeopardised. So here is another contradiction between the two.
I.C.I. believes that it is best to combine the manufacture of polymers with conversion into fibres and through marketing. It says the fundamental decision ought to be taken with a view to this question. Courtaulds takes exactly the opposite view. They cannot both be right.

Mr. Edward Wakefield (Treasurer of Her Majesty's Household): There are two sides to the question.

Mr. Callaghan: There are two sides to the question. I am grateful to the hon. Gentleman for reaching the conclusion before I got there.
I.C.I. believes that the merger is in the national interest. Unanimously, it believes that it is in the national interest. The whole board agrees on this, but Courtaulds put out a statement to say that the merger will retard new developments, that it will harm the fashion trade, that it will harm the textile industry and the customer, and will jeopardise world markets. We cannot have a more flagrant contradiction than that.
Where does the truth lie? Has the President of the Board of Trade any idea at all? Does he care? He has done a bad day's work not only for his party but for the industrial progress of


this country today by neglecting to take the steps which are proposed in this Motion.
There are other matters, too, which are at issue here and which have not been referred to in the statements of either company. According to The Times editorial today, which I am sure the President of the Board of Trade will have read, the German chemical industry does more research in proportion to turnover than I.C.I. The German chemical industry grows faster than I.C.I. The German chemical industry invests more heavily in its industry than does I.C.I. The German chemical industry exports more than I.C.I.
I do not know what the facts are. I do not know whether there have been some special elements in the German situation which have made it possible for the Germans to have a path of progress which has not been opened to I.C.I. Does the President of the Board of Trade? If he does not know, ought he not to know? He is standing aside and permitting a merger which will have and must have profound effects on the whole development of the man-made fibre industry in this country.
According to a new journal, European Chemical News, prices for most of the chemical products in France, Italy, Belgium and Germany have been compared with ours. Of 92 prices which compared, the British were higher in 39 cases, often by a wide margin. Last week's issue gave a further 102 products, of which the British prices were higher in 32 cases. Is there a reason for this? Does the right hon. Gentleman know? If he does not, ought he not to know before he allows a merger of this sort to continue unhampered?
I accuse the President of the Board of Trade of failing in his duties towards this great industry. Never before have I heard of a great industry of this sort, clearly one of the nation's vital industries, having its future determined by the higgling of the market and whether the shareholders of Courtaulds think that they will do better by getting tax-free cash plus a free issue of stock. This is instead of having, as we had when we considered the future of the coal industry, as we had when we considered the future of aircraft

and as we had when we considered the future of transport, long public debates preceding action. There were substantial inquiries into the future of those industries, but now the right hon. Gentleman has shuffled responsibility on to the shoulders of the shareholders saying, "It is all yours; take it; decide the future of this industry; the Government could not care less".
This all adds up to an impregnable case for an inquiry by an independent body which could look into some of these issues. I cannot see—and nor can many hon. Members opposite—what prevents the Government from accepting this proposal and going ahead with an inquiry of this nature. The right hon. Gentleman says that if afterwards the Government find that damage has been done to the industry, there will be an inquiry and that the Government might even order something to be done. I expect that many of my hon. Friends will remember wayside pulpits and that outside chapels there used to be mottoes—I do not know whether the right hon. Gentleman will remember—which said, "Better a fence at the top of the cliff than an ambulance at the bottom". It is an aphorism, but it is far better that the right hon. Gentleman should have an inquiry now, before the damage is done, than that he should try to pick up the bits when lying in wreckage at the bottom of the cliff. It has been said many times before and, I have no doubt, much better.
One of the interesting things about this matter is that the two chairmen of the boards have been considering the question of the public interest. Mr. Chambers has said that his board is unanimously of the view that the public interest is best served by this merger. But is that a fair question for Mr. Chambers to ask or to answer? Is it his job? Let us suppose that he had reached a different conclusion. I am sure that he decided quite honestly when he concluded that both profits and the national interest would be served, as he said in his advertisements.
But let us suppose that he had reached the conclusion that the national interest would be best served by the merger, but that profits were likely to be lower. What would his recommendation to the shareholders then have been? What should


his recommendation to the shareholders have been? Let us put it the other way round and suppose that he had decided that his profits would be higher, but that the national interest would not be served by the merger. What should he then have said to the shareholders? We know what has been said on previous occasions—"It may be anti-British, but it makes sense to me".
Does not the President of the Board of Trade realise the intolerable position into which we are getting today, in which chairmen of great corporations have to make up their minds about the national interest while the Government sit silent and supine? This is an abdication of all authority. I am sorry that more hon. Gentlemen opposite were not here to hear the speech of my hon. Friend the Member for Bilston (Mr. R. Edwards). Unless we control these monopolies, they will devour us. Let there be no doubt about this, because what is happening in the country at the present time, as anyone who studies the matter can see, and as is well known to hon. Gentlmen, is that the classical capitalism on which we were brought up when we first became Socialists, and in which many hon. Gentlemen still seem to believe, is disappearing under our eyes.
What is happening instead is the growth of private monopoly to such an extent that there are rival sources and centres of power in this country, unaccountable to anyone, and irresponsible in the true sense of the word. The late Aneurin Bevan used to say, and it is becoming ever clearer, that power does not reside in this House or in the Government. The Government are abdicating their authority. Power is residing today more and more in the hands of the Paul Chambers, and when one combines that with the setting up of the National Economic Development Council and the possible developments that could take place there, in which decisions quite outside the range and reach of Parliament may be taken about the direction and pace of British industry, one realises that it is high time the Government stopped being so complacent and supine about some of these problems.
What is the proper relationship of Parliament to the growth of these monopolies? I echo the words of the

hon. Member for Louth. I am sorry that more of his hon. Friends were not here to hear them. If there is to be a monopoly, in the opinion of the hon. Gentleman it should be publicly accountable. The logical development of the capitalist system in this country is more and more towards monopoly. It is leading more and more to the position where the Government will have to abdicate completely and allow the economic system to be outside their control, or get out and let somebody else do the job for them, or take some action to make these industries accountable.
Joan Robinson, in a brilliant analysis of the situation about five years ago, said this in a broadcast on the B.B.C.:
The tendency to monopoly is so deeply embedded in a modern industrial system that it is hard to see how to root it out without damaging the system.
We all know that that is true. The tendency to monopoly is continuing and growing. At the last General Election, hon. Gentlemen opposite taunted us that if we got back to power 600 firms would be nationalised. How many of these 600 still exist? Does the President of the Board of Trade know? It would be an interesting and salutary lesson to him to find out, and to see what is taking place under his nose in British industry today.
I very much regret that we have not had a lead from the Government on this issue. Every speech from the other side of the House today, and I have heard every one of them, has been critical of the Government. Hon. Gentlemen opposite have been defensive. They have been worried. One or two even said that they would not be able to vote with the Government. They used to say
the hungry sheep look up, and are not fed",
but the hungry sheep were not even here to hear the speeches.
I cannot believe that any hon. Member who has been present today could go away satisfied that in the atmosphere that is developing in British industry, and in the concentration that is taking place, the Government know what they want to do, or have any plan for dealing with it, or even the energy to think about it. The more we look at the Government the more we wonder how they manage to hang on. I think that the only reason they manage to do so is that


hon. Members opposite never listen to the debates, and, therefore, do not know the extent to which they are rolled in the dust by those of their supporters who are present.
It is astonishing. The Government seem to be divided between those, like the Chancellor of the Exchequer, who never have the glimmering of an idea what it is all about and those, like the Chief Secretary, who understand what it is all about but whose ideological prejudices are of such a character that they are quite inhibited from doing anything about it—and they are all led by a Prime Minister who retains his office only because his party cannot agree as to who ought to succeed him.
I want to give full time to the Chief Secretary to make his answer to this case. I do not want to deny him one minute of time. If he rejects accountability by private monopolies; if he rejects the solution of public ownership, which provides that monopolies shall be accountable to the people, through this House, what does he offer in its place? Will he tell us? What is the Conservative Party's solution to the problem? We no longer hear any prattling about competitive private enterprise. The Conservatives do not believe in it themselves now. They are already thinking up slogans for the next General Election. They need make only one simple addition to their previous slogan—"Conservative Freedom Works." After having heard the speeches today we know that they need add only one word, "Conservative Freedom Works—Abroad". We have to have monopoly in this country in order to be able to compete abroad. This is the new hope that the Tory Party has to offer our people.
There is a very natural and instinctive distaste of monopoly in this country. It is very deep-rooted. Indeed, the Conservative Party capitalised on that sentiment when it dealt with such issues as British Railways, the National Coal Board, and the rest. But, as has been said by hon. Members on both sides of the House this evening, it is equally true that British industry has moved into a position where monopolies, with the large economies that can be obtained from large-scale enterprise, may well be necessary.
That being the case—and it seems fairly common ground on both sides of the House—what does the Conservative Party intend to do to ensure that this instinctive, deep-rooted, and, in my view, very proper distaste of monopolies shall be quieted, and to ensure that we arrive at a position in which we can tell the people that when the power of which they are rightly jealous is exercised by private persons they shall be brought under public control in some way? This is the challenge to the Conservative Party.
We have our solution. We think that public ownership is the first step towards solving these problems. It is not the last step; we have discovered that over the last twenty years. Hon. Members opposite are very ready to abuse public ownership, but we are trying to face these problems honestly, whether the Minister of Aviation is or is not. It is clear that, under public ownership, when the pressure is taken off, the danger still arises of the industry becoming less efficient. The danger may also arise of prices being fixed at inappropriate levels, because there is no competition.
All these things exist under public ownership, and none of us shirks the fact. But we say that at least under public ownership there is accountability. The hon. Member for Kidderminster (Mr. Nabarro) has made a "corner" in the nationalised industries for the last ten years. I will say this, that at least we have had many more facts brought into the open, and we know much more about the Coal Board and British Railways than we do about I.C.I. and Courtaulds.
It was said this afternoon that it was not a very edifying spectacle to see the chairmen of these two companies quarrelling. I do not know whether it is edifying or not, but I say let them get on with it. At least, it has been instructive for those who did not know what was going on. There are many lessons to be learned from this. If the Conservative Party rejects our solution, what is its own solution? This is what we still want to hear. We are right to accuse the party opposite of being "timid and complacent". Indeed, I go further, and say that we should have also put the word "neglectful" in our Motion. We


are right—the people know that we are right and many hon. Members opposite believe that we are right—to demand an inquiry before the merger goes on. Let us hear from the Chief Secretary to the Treasury what excuses the Government can make for resisting it.

9.26 p.m.

The Chief Secretary to the Treasury (Mr. Henry Brooke): In fact, the Opposition are wrong. Hon. Members opposite are wrong, because they are running away from the actualities. The Conservative Government intend to further everything in their power which would help British industry obtain the exports without which this country cannot live. None of this talk or argument about public or private ownership, accountability or non-accountability will avail us one iota in the end unless we get those exports, and we shall gel them only if we so manage our affairs as to secure the highest degree of efficiency of management, production and techniques throughout British industry.
The One Nation Group in the Conservative Party published an extremely interesting booklet a few years ago, called "Change is our Ally". I have not had the privilege of being a member of that Group, but I am quite certain that we cannot fulfil our commercial and our industrial destiny in the world if we are afraid of change. Having listened to this debate, it seems to me that the theme of the Opposition has been that before we allow any change, we should have a public inquiry. That is not the way in which we shall beat our opponents in the tests of international trade.
This debate has been extremely good-tempered and valuable and interesting. I should like, in all humility, to pay tribute to the thoughtful speeches which have been made from both sides of the House. I think that hon. Members would like me to congratulate my hon. Friend the Member for Eye (Sir H. Harrison) on his near-maiden speech which charmed us all. I wish to seek to deal with a number of points which have been raised because, although we are debating a general issue of the first importance to the country, we are doing it in the particular context of certain specific cases which have occupied a good deal of public attention lately.

My right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), who made one of the most valuable contributions to the debate, spoke about the Government's opposition to the Monopolies Commission recommendation relating to Imperial Tobacco and Gallaher. The essential fact is that Imperial Tobacco at the present time owns 37½ per cent. of the shares of Gallaher, and the Monopolies Commission found no evidence of interference with Gallaher by Imperial Tobacco through its large shareholding. But it argued that that large shareholding made, or tended to make, or might tend to make, Imperial Tobacco compete less keenly with Gallaher.
The facts are as they were set out in the Report, that 11 per cent. of the total trade passed from Imperial Tobacco to Gallaher in a period of four years. One would certainly think that a loss of business on that scale would make Imperial Tobacco sit up and take notice. I am not sure whether it was the argument of the Commission, but it certainly was the argument of some hon. Members in the debate, that that did not matter to Imperial because Imperial would get it back through its shareholding. It was argued that this was a matter of gaining on the swings what one lost on the roundabouts, six of one and half a dozen of the other. But it is not six of one and half a dozen of the other; it is five of one and two of the other.
I have yet to meet the person who is trying to sell something and says, "It does not matter if you give me £5 or £2 for this, it is all the same to me". That is exactly the situation of Imperial Tobacco. Imperial Tobacco cannot in any circumstances secure the benefit of more than 37½ per cent. of the value of any trade that it loses to Gallaher. The other 62½ per cent. will go elsewhere and no one who is responsible to his shareholders can overlook that. The facts as established are that Imperial Tobacco had not interfered with Gallaher over the period of thirty years in which Imperial had had this large shareholding, at one time a majority shareholding. It had given an undertaking not to interfere with Gallaher, and, as I pointed out, it had every financial reason to compete as vigorously as possible against Gallaher.
My hon. Friend the Member for Reading (Mr. Emery), who also made a very thoughtful speech, asked what would happen if Gallaher were to make some break-through discovery—for instance, in a form of cigarette which would be safeguarded against any tendency to produce cancer—and Imperial found its trade being damaged thereby. I cannot tell what would happen in those hypothetical circumstances. What I can say is that in thirty years no such situation has arisen. One should not condemn a common sense solution of this difficult problem on account of some highly unlikely contingency which in thirty years has not eventuated. In the light of the completely objective examination which the President of the Board of Trade gave to this important Report he found—and I agree with him—that there was no case for drastic action against a hypothetical possibility which it would be Imperial Tobacco's interest not to make into an actuality.
I think my hon. Friend the Member for Reigate said that this was a snub to the Commission. Other hon. Members made similar suggestions, but no one has ever suggested or maintained that the Monopolies Commission is an executive body or a body whose findings are final and conclusive. No one has ever suggested—this was accepted on both sides of the House when the legislation was going through—that the Commission is anything other than advisory to the Government. If a body is advisory to the Government, the Government themselves must carry the responsibility of taking the final decision.
The Government must take the decisions. They have that responsibility. They must answer for them to Parliament as my right hon. Friend has done today. I have no doubt whatever that he was entirely right in judging that the case had not been made by this very valuable and authoritative advisory body, the Monopolies Commission, for drastic action to deprive Imperial Tobacco of its large shareholding in Gallaher when it appeared that no harm had come in thirty years from that shareholding and Imperial Tobacco had given an undertaking—which, frankly, it seemed to be in its own financial interests to give—that it would not interfere in the management of Gallaher.
As I said at the beginning, we have to deal with actualities, and in dealing with actualities, we must have quite clear and precise policies. Several hon. Members referred to the Jenkins Committee. The Jenkins Committee is at work on certain aspects of these matters. The relevant part of the Committee's terms of reference was quoted earlier, and I need not repeat it. I was asked when the Committee was likely to report. My right hon. Friend tells me that the Committee has indicated that it hopes to report within the next six months, and its report will then receive very careful consideration.
Some time before this Courtauld-I.C.I. marriage, whether a shotgun marriage or otherwise, was heard of, my right hon. Friend had set up this inquiry within his Department into the working of monopolies policy. My hon. Friend the Member for Reading asked how extensive that would be. As far as I can judge, it would cover the various matters which he mentioned, but may I take this opportunity of extending an invitation which my right hon. Friend the President of the Board of Trade gave? He said that his Department would shortly be inviting expressions of opinion from trade associations and the like. He felt that it went without saying that he would welcome opinions expressed by hon. Members on both sides of the House. I know that he will bring to the attention of those who are conducting that inquiry what my hon. Friend the Member for Reading said, and if he or any other hon. Member cares to amplify his remarks in this debate or to bring forward any other points which ought to be taken into account in the inquiry. I know that my right hon. Friend will be very grateful indeed.

Mr. Jay: Will the report of this inquiry be published?

Mr. Brooke: I cannot say that. At this stage this is an inquiry within the Department. The right hon. Member for Battersea, North (Mr. Jay), who opened the debate in a speech which I think we all appreciated, said, if I remember rightly, that over the whole field of mergers or intended mergers or threatened mergers there was a vague feeling of public unease. I put it to the House that the right answer to a vague


feeling of public unease is not a vague kind of public inquiry, and yet that is what the Opposition have been asking for. No one has said what shape this inquiry into the proposed Courtauld-I.C.I. merger should take. No one has said precisely what this inquiry should inquire into. Nobody has said who would be qualified to undertake it.
The Opposition said that they were not in a dilemma. Of course they are not in a dilemma, because they are running away from all the hard decisions which have to be taken. It is very easy, when faced with a difficult choice, to turn one's back on it.—[Interruption.] If hon. Members will allow me to speak, let me repeat that I have never heard such an abject failure to specify the form and the shape of the inquiry which the Opposition said they were recommending. It is the very point made by my right hon. Friend the Member for Reigate at the beginning of his speech. The hon. Member for Edmonton (Mr. Albu) alleged that the Board of Trade attitude here was amateurish. It seems to me amateurish to ask anybody to inquire into precisely what will happen under a merger which has not yet been formed.
Reference was made to the American experience. It was asked why cannot we be as tough as the United States is in fighting monopoly. The review which is now being made of all monopoly policy will naturally take into account the American law, but the economic conditions in the two countries are very different, and it certainly does not follow that a system appropriate to American conditions will meet our own needs, which, in important respects, are different from theirs.
The United States economy, for one thing, is far less dependent on export trade than is the economy of the United Kingdom. That means, for one thing, that they can apply much more readily than we could an anti-trust policy based on social rather than economic considerations. It is much easier for them to take the line, which they tend to take, that monopoly is wholly bad and should be stopped. We have to consider in all these things what will be to our economic interests, because we have no great margin to spare.
The Government's policy has been to consider our plans and our attitude primarily from the economic standpoint, and not on the basis of a prior judgment that monopoly is intrinsically and always bad. If the Americans were as dependent as we are on international trade, they might not be able to afford to maintain in their home market their present anti-trust policy, which certainly does seem to observers in some cases to make certain sections of American industry less efficient than they otherwise would be.

Mr. Holt: We seem to be getting a little way from the I.C.I. and Courtaulds merger and on to the general problem. Would the right hon. Gentleman say, as there could be many different kinds of inquiry, why a reference should not be made to the Monopolies Commission of the man-made fibres division of I.C.I. and the whole of Courtaulds?

Mr. Brooke: I shall come back to that point. I noted it in the hon. Member's speech, and it was a point also made by my right hon. Friend the Member for Reigate. I assure the hon. Member that I am seeking to do justice both to the general issue and to the particular issue before us. When he interrupted me, I was about to say that undoubtedly the American practice, while it may have certain advantages, has certain disadvantages, and these disadvantages might be particularly harmful to our industries, because our industries are dependent so much more than theirs on the export markets of the world.
The one question which matters here in a case like that of I.C.I. and Courtaulds is whether the merger will make the manufacture of synthetic fibres more efficient, and sell them more competitively, than with the two firms, or not. I am certainly not judging that, and I am glad to say that most hon. Members who have taken part in the debate have admitted that they are not competent to judge that, either. The answer, in fact, depends on technical, commercial and management considerations which, as my right hon. Friend pointed out, cannot be foreseen and cannot be evaluated.
There is a difference between the judge who has to inquire into the question whether there are grounds for the


divorce of two parties who have been married for some years and what the Opposition are asking for, which is an inquiry, before the marriage or the liaison starts, to determine whether it will turn out a successful marriage and whether the offspring will be a credit to the nation.
The Opposition's case this evening has failed, first because no inquiry into unknowns can be reliable or a safe and sound basis for decisive action. It fails, secondly, because no test has been suggested from any quarter as to which mergers should be the subject of advance inquiry. As my right hon. Friend the President of the Board of Trade said, there are a number of mergers now in course of discussion, as anybody who reads the financial columns of The Times can tell. Is the test to be merely this: will the final merger, if it goes through, be very large? Yet a merger may be comparatively small by external standards, because the whole of the industry is a small one.
What is the test to be? Should there have been an inquiry before each of the mergers which have taken place over the last ten or fifteen years in the motor industry? What is the meaning of "monopoly"? In the old days "monopoly" meant 100 per cent. control of a trade. Now since we have had the Monopolies Commission a firm can be held to hold a monopoly when it controls no more than one-third of the trade. Yet by the old standard that is nothing like a monopoly and it may be subject to the most extreme competition from other firms. Despite the speeches of Opposition Members, there is no easy test to decide which of these mergers or projected mergers should be the subject of an advance inquiry and should be held up for a period of months or more until the inquiry has been completed.

Sir C. Osborne: Will my right hon. Friend give an undertaking that he will ask I.C.I. whether the charge made by Courtaulds that I.C.I. is charging excessive prices for raw materials is well founded?

Mr. Brooke: I am not going to enter into this sort of argument. It would be entirely wrong for the Government to

say that they were not going to set up an independent inquiry into this and then for individual Ministers to express views on this or that aspect of the matter which might be thought to be biased.

Mrs. White: Will not the Chief Secretary agree that whatever definition he chooses a 90 per cent. monopoly of a major industry would surely be a qualifying one?

Mr. Brooke: It must be remembered, as I am sure the hon. Lady knows, that man-made fibres constitute only 28 per cent. of all the materials being used by this country's textile industry. I think that what the hon. Lady has in mind is the question raised by the hon. Member for Bolton, West (Mr. Holt) and my right hon. Friend the Member for Reigate as to whether my right hon. Friend would here and now refer the case of Courtaulds to the Monopolies Commission or would give a warning to Mr. Paul Chambers that he would do so immediately if the merger went through. I have consulted my right hon. Friend on that. He tells me that he has no grounds for referring either company to the Monopolies Commission, because he has no evidence before him that either company is exploiting its position as a producer of man-made fibres. It would be entirely wrong for any President of the Board of Trade, regardless of party, to refer something to the Monopolies Commission when he has no evidence at all that exploitation of the monopoly is taking place. But, naturally, it is open to any hon. Member who has suggested this to submit evidence and I can certainly say that he will take it into consideration. The interesting thing is that the consumers and users of these products—who are, one would think, those most closely interested—have not taken any steps of that kind.

Mr. Gresham Cooke: Is my right hon. Friend aware that the consumers' association—representing the users of man-made fibres—wrote a letter to The Times expressing great concern about the possibility of the tie-up between Courtaulds and I.C.I. and wondering whether there would be an increase in prices if the merger came about?

Mr. Brooke: What my hon. Friend says illustrates the impossibility of having an inquiry into something that has not yet happened, because, with great respect, no one can foresee whether the new merger, if it comes into effect, will be an exceptionally favourable instrument of British industrial policy in the world or will exploit its position. That is what this matter turns upon. I am not going to express a view on this argument
I can tell the hon Lady the Member for Flint, East (Mrs. White) that she and other hon. Members were fully justified in raising questions on behalf of their constituents who may be employed by one or other of these firms. One thing is perfectly clear; that both of these firms are expansionist minded. Neither of them has shown the slightest inclination to restrict production for profit purposes. Both of them are in a highly competitive industry, up against international competition, and the greatest security for those employed by them will be that the firm which employs them shall have attained the highest possible degree of efficiency.
Frankly, I think that the events of the past few weeks have themselves done good for British industry.[HON. MEMBERS: "Oh" The reason is that both of these firms have, as a result, publicly made known their targets for the future. Whatever happens they will be keyed up to fulfil those targets and that must be for the good of the nation as a whole.

Mrs. Barbara Castle: Is the right hon. Gentleman really telling the House that Courtaulds' announcements that it is prepared, if necessary, to realise £120 million worth of its assets in order to throw in a counter bribe to its shareholders to offset the I.C.I. bribe is really in the public interest? Is that for the good of the nation and for the best use of our resources at a time when the Government are calling for a restraint on incomes policy for the workers?

Mr. Brooke: I cannot pass a final judgment, but I can say that if there are millions of pounds lying unused in the possession of any company it is probably in the national interest that they should

be brought into use, by whatever means that is done.
I have been asked what action the President of the Board of Trade will take about tariffs. No one can tell as yet whether we shall enter the Common Market. If we join the European Community, the I.C.I.-Courtaulds merger will certainly not be a monopoly supplier. There will be strong competition—indeed, there is strong competition already—among continental producers. If we do not enter the Common Market then whatever happens we shall certainly need industrial organisations strong enough to enable us to hold our own in a world in which manufacturing units are steadily growing bigger.
Some hon. Members have spoken as though this merger, should it go through, would be of unparalleled size. In fact, there would be no fewer than fifteen industrial organisations in the world still larger than the I.C.I.-Courtaulds merger. If we join the Common Market we may have to make certain changes in our monopolies legislation. Broadly, the approach to monopolies in the Treaty of Rome is much closer to our own than to the American approach. The aim under the Treaty is, like ours, the control of the abuse of monopoly power rather than control of monopoly as such.
I was asked what would be the Government's attitude towards the tariff protecting these man-made fibres if there were to be evidence of exploitation of monopoly. The United Kingdom customs duty on man-made fibres is generally high; it varies from one product to another. My right hon. Friend has authorised me to say that if any representative body of users felt that the merged organisation—or, indeed, either of the firms should a merger not take place—was sheltering behind a protective tariff and not selling at the lowest prices that might be obtained, such consumers could apply for any import duties in the man-made fibres sphere to be reduced. In those circumstances, the Board of Trade would immediately consider such an application—[Laughter.]—but it would give the firms or the industry affected the right to reply.
If hon. Members laugh, they must be very little concerned about the good of


British industry or of the consumers—[Interruption.] I sometimes wonder whether the Opposition realise the intensity of modern business competition. In the modern world, one cannot have everything held up for twelve months while an inquiry takes place. It is no good harping back to the old days. What matters, if we are to fulfil our export obligations, is that we shall secure throughout British industry vigorous and highly intelligent management, and if we are to do that we must not say that in no circumstances shall there be any change until there has been a public inquiry.

That is the first test—not whether it is private or public, not whether there is accountability or non-accountability. I do not remember long, independent, objective public inquiries before the Opposition nationalised coal or steel—[Interruption.] I do remember a great deal of prejudice, and much confession that the Opposition had not really thought out their policy. We have thought out our policies, and we intend to carry them through.

Question put:—

The House divided: Ayes 230, Noes 317.

Division No. 90.]
AYES
[10.0 p.m.


Abse, Leo
George, Lady Megan Lloyd (Crmrthn)
MacColl, James


Ainsley, William
Ginsburg, David
McInnes, James


Albu, Austen
Gordon Walker, Rt. Hon. P. C.
McKay, John (Wallsend)


Allaun, Frank (Salford, E.)
Gourlay, Harry
Mackie, John (Enfield, East)


Allen, Scholefield (Crewe)
Grey, Charles
McLeavy, Frank


Awbery, Stan
Griffiths, Rt. Hon, James (Llanelly)
MacPherson, Malcolm (Stirling)


Beaney, Alan
Griffiths, W. (Exchange)
Mahon, Simon


Bellenger, Rt. Hon. F. J.
Grimond, Rt. Hon. J.
Mallalieu, J. P. W.(Huddersfield, E.)


Bence, Cyril
Gunter, Ray
Manuel, A. C.


Bennett, J. (Glasgow, Bridge ton)
Hale, Leslie (Oldham, W.)
Mapp, Charles


Benson, Sir George
Hall, Rt. Hn. Glenvil (Colne Valley)
Marsh, Richard


Blackburn, F.
Hamilton, William (West Fife)
Mason, Roy


Blyton, William
Hannan, William
Mayhew, Christopher


Boardman, H.
Hart, Mrs. Judith
Mellish, R. J.


Bowden, Rt. Hn. H. W. (Leics, S. W.)
Hayman, F. H.
Mendelson, J. J.


Bowles, Frank
Healey, Denis
Millan, Bruce


Boyden, James
Henderson, Rt. Hn. Arthur(Rwly Regls)
Milne, Edward


Braddock, Mrs. E, M.
Herbison, Miss Margaret
Mitchison, G. R.


Brockway, A. Fenner
Hewitson, Capt. M.
Monslow, Walter


Broughton, Dr. A. D. D.
Hill, J. (Midlothian)
Morris, John


Brown, Rt. Hon. George (Belper)
Hilton, A. V.
Mort, D. L.


Brown, Thomas (Ince)
Holman, Percy
Moyle, Arthur


Butler, Herbert (Hackney, C.)
Holt, Arthur
Mulley, Frederick


Butler, Mrs. Joyce (Wood Green)
Houghton, Douglas
Neal, Harold


Callaghan, James
Howell, Charles A. (Perry Barr)
Noel-Baker, Francis (Swindon)


Castle, Mrs. Barbara
Howell, Denis (Small Heath)
Noel-Baker, Rt. Hn. Philip (Derby, S.)


Chapman, Donald
Hoy, James H.
Oliver, G. H.


Cliffe, Michael
Hughes, Cledwyn (Anglesey)
Oram, A. E.


Corbet, Mrs. Freda
Hughes, Emrys (S. Ayrshire)
Oswald, Thomas


Craddock, George (Bradford, S.)
Hughes, Hector (Aberdeen, N.)
Owen, Will


Cronin, John
Hunter, A. E.
Padley, W. E.


Crosland, Anthony
Hynd, H. (Accrington)
Paget, R. T.


Cullen, Mrs. Alice
Hynd, John (Attercliffe)
Pannell, Charles (Leeds, W.)


Darling, George
Irvine, A. J. (Edge Hill)
Pargiter, G. A.


Davies, Harold (Leek)
Irving, Sydney (Dartford)
Parker, John


Davies, Ifor (Gower)
Janner, Sir Barnett
Parkin, B. T.


Davies, S. O. (Merthyr)
Jay, Rt. Hon. Douglas
Paton, John


Deer, George
Jeger, George
Pavitt, Laurence


Delargy, Hugh
Jenkins, Roy (Stechford)
Pearson, Arthur (Pontypridd)


Dempsey, James
Johnson, Carol (Lewisham, S.)
Peart, Frederick


Diamond, John
Jones, Rt. Hn. A. Creech (Wakefield)
Pentland, Norman


Dodds, Norman
Jones, Dan (Burnley)
Plummer, Sir Leslie


Donnelly, Desmond
Jones, Elwyn (West Ham, S.)
Popplewell, Ernest


Driberg, Tom
Jones, J. Idwal (Wrexham)
Prentice, R. E.


Ede, Rt. Hon. C.
Jones, T. W. (Merioneth)
Price, J. T. (Westhoughton)


Edelman, Maurice
Kelley, Richard
Probert, Arthur


Edwards, Rt Hon. Ness (Caerphilly)
Kenyon, Clifford
Proctor, W. T.


Edwards, Robert (Bilston)
Key, Rt. Hon. C. W.
Pursey, Cmdr. Harry


Edwards, Walter (Stepney)
King, Dr. Horace
Randall, Harry


Evans, Albert
Lawson, George
Rankin, John


Fernyhough, E.
Ledger, Ron
Redhead, E. C.


Fitch, Alan
Lee, Frederick (Newton)
Reid, William


Fletcher, Eric
Lee, Miss Jennie (Cannock)
Reynolds, G. W.


Foot, Dingle (Ipswich)
Lever, Harold (Cheetham)
Rhodes, H.


Foot, Michael (Ebbw Vale)
Lever, L. M. (Ardwick)
Roberts, Coronwy (Caernarvon)


Forman, J. C.
Lewis, Arthur (West Ham, N.)
Robertson, John (Paisley)


Fraser, Thomas (Hamilton)
Loughlin, Charles
Robinson, Kenneth (St. Pancras, N.)


Gaitskell, Rt. Hon. Hugh
Mabon, Dr. J. Dickson
Ross, William


Galpern, Sir Myer
McCann, John
Royle, Charles (Salford, West)




Shinwell, Rt. Hon. E.
Symonds, J. B.
Wigg, George


Silverman, Julius (Aston)
Taylor, Bernard (Mansfield)
Wilkins, W. A.


Silverman, Sydney (Nelson)
Thomas, George (Cardiff, W.)
Willey, Frederick


Skeffington, Arthur
Thomas, Iorwerth (Rhondda, W.)
Williams, D. J. (Neath)


Slater, Mrs. Harriet (Stoke, N.)
Thompson, Dr. Alan (Dunfermline)
Williams, LI. (Abertillery)


Slater, Joseph (Sedgefield)
Thomson, G. M. (Dundee, E.)
Williams, W. R. (Openshaw)


Small, William
Thornton, Ernest
Williams W. T. (Warrington)


Smith, Ellis (Stoke, S.)
Timmons, John
Willis, E. G. (Edinburgh, E.)


Snow, Julian
Tomney, Frank
Wilson, Rt. Hon. Harold (Huyton)


Sorensen, R. W.
Ungoed-Thomas, Sir Lynn
Winterbottom, R. E.


Soskice, Rt. Hon. Sir Frank
Wade, Donald
Woodburn, Rt. Hon. A.


Spriggs, Leslie
Wainwright, Edwin
Woof, Robert


Steele, Thomas
Warbey, William
Wyatt, Woodrow


Stewart, Michael (Fulham)
Watkins, Tudor
Yates, Victor (Ladywood)


Stonehouse, John
Weitzman, David
Zilliacus, K.


Stones, William
Wells, Percy (Faveraham)



Strachey, Rt. Hon. John
Wells, William (Walsall, N.)
TELLERS FOR THE AYES:


Strauss, Rt. Hn. G. R. (Vauxhall)
White, Mrs. Eirene
Mr. Rogers and Mr. Short.


Swingler, Stephen
Whitlock, William





NOES


Agnew, Sir Peter
Crowder, F. P.
Hobson, Sir John


Aitken, W. T.
Curran, Charles
Hocking, Philip N.


Allan, Robert (Paddington, S.)
Currie, G. B. H.
Holland, Philip


Allason, James
Dalkeith, Earl of
Hollingworth, John


Amery, Rt. Hon. Julian
Dance, James
Hope, Rt. Hon. Lord John


Arbuthnot, John
d'Avigdor-Goldsmid, Sir Henry
Hopkins, Alan


Ashton, Sir Hubert
de Ferrants, Basil
Hornby, R. P.


Atkins, Humphrey
Digby, Simon Wingfield
Hornsby-Smith, Rt. Hon. Dame P.


Barber, Anthony
Donaldson, Cmdr. C. E. M.
Howard, Hon. G. R. (St. Ives)


Barter, John
Doughty, Charles
Howard, John (Southampton, Test)


Baxter, Sir Beverley (Southgate)
Drayson, G. B.
Hughes Hallett, Vice-Admiral John


Beamish, Col. Sir Tufton
du Cann, Edward
Hughes-Young, Michael


Bell, Ronald
Duncan, Sir James
Hulbert, Sir Norman


Bennett, F. M. (Torquay)
Eccles, Rt. Hon. Sir David
Hutchison, Michael Clark


Bennett, Dr. Reginald (Gos &amp; Fhm)
Elliot, Capt. Walter (Carshalton)
Iremonger, T. L.


Berkeley, Humphry
Elliott, R. W. (Nwcstle-upon-Tyne, N.)
Irvine, Bryant Godman (Rye)


Bevins, Rt. Hon. Reginald
Emery, Peter
James, David


Biffen, John
Emmet, Hon. Mrs. Evelyn
Jenkins, Robert (Dulwich)


Biggs-Davison, John
Errington, Sir Eric
Jennings, J. C.


Bingham, R. M.
Erroll, Rt. Hon. F. J.
Johnson, Dr. Donald (Carlisle)


Birch, Rt. Hon. Nigel
Farey-Jones, F. W.
Johnson, Eric (Blackley)


Bishop, F. P.
Fell, Anthony
Joseph, Sir Keith


Black, Sir Cyril
Finlay, Graeme
Kaberry Sir Donald


Bossom, Clive
Fisher, Nigel
Kerans, Cdr. J. S.


Bourne-Arton, A.
Fletcher-Cooke, Charles
Kerby, Capt. Henry


Box, Donald
Fraser, Hn. Hugh (Stafford &amp; Stone)
Kerr, Sir Hamilton


Boyd-Carpenter, Rt. Hon. J.
Fraser, Ian (Plymouth, Sutton)
Kershaw, Anthony


Boyle, Sir Edward
Freeth, Denzil
Kimball, Marcus


Braine, Bernard
Galbraith, Hon. T. G. D.
Kirk, Peter


Brewis, John
Gammans, Lady
Kitson, Timothy


Bromley-Davenport, Lt.-Col. Sir Walter
Gardner, Edward
Lambton, Viscount


Brooke, Rt. Hon. Henry
George, J. C. (Pollok)
Lancaster, Col. C. G.


Brooman-White, R.
Gibson-Watt, David
Langford-Holt, Sir John


Brown, Alan (Tottenham)
Gilmour, Sir John
Leather, E. H. C.


Browne, Percy (Torrington)
Glover, Sir Douglas
Leavey, J. A.


Bryan, Paul
Glyn, Dr. Alan (Clapham)
Leburn, Gilmour


Buck, Antony
Glyn, Sir Richard (Dorset, N.)
Legge-Bourke, Sir Harry


Bullard, Denys
Goodhart, Philip
Lewis, Kenneth (Rutland)


Bullus, Wing Commander Eric
Goodhew, Victor
Lilley, F. J. P.


Burden, F. A.
Gough, Frederick
Lindsay, Sir Martin


Butcher, Sir Herbert
Gower, Raymond
Linstead, Sir Hugh


Campbell, Sir David (Belfast, S.)
Grant, Rt. Hon. William
Litchfield, Capt. John


Campbell, Gordon (Moray &amp; Nairn)
Grant-Ferris, Wg. Cdr. R.
Lloyd, Rt. Hn. Geoffrey (Sut 'nC' dfield)


Carr, Compton (Barons Court)
Green, Alan
Lloyd, Rt. Hon. Selwyn (Wirral)


Carr, Robert (Mitcham)
Gurden, Harold
Longbottom, Charles


Cary, Sir Robert
Hamilton, Michael (Wellingborough)
Longden, Gilbert


Channon, H. P. G.
Hare, Rt. Hon. John
Loveys, Walter H.


Chataway, Christopher
Harris, Frederic (Croydon, N.W.)
Lucas, Sir Jocelyn


Clark, Henry (Antrim, N.)
Harris, Reader (Heston)
Lucas-Tooth, Sir Hugh


Clark, William (Nottingham, S.)
Harrison, Brian (Maldon)
McAdden, Stephen


Clarke, Brig. Terence (Portsmth, W.)
Harrison, Col. Sir Harwood (Eye)
MacArthur, Ian


Cleaver, Leonard
Harvey, Sir Arthur Vere (Macclesf'd)
McLaren, Martin


Cole, Norman
Harvey, John (Walthamstow, E.)
McLaughlin, Mrs. Patricia


Collard, Richard
Harvie Anderson, Miss
Maclay, Rt. Hon. John


Cooke, Robert
Hastings, Stephen
Maclean, Sir Fitzroy (Bute &amp; N. Ayrs.)


Cooper, A. E.
Hay, John
Macleod, Rt. Hn. Iain (Enfield, W.)


Cordeaux, Lt.-Col. J. K.
Heald, Rt. Hon. Sir Lionel
MacLeod, John (Ross &amp; Cromarty)


Corfield, F. V.
Hendry, Forbes
McMaster, Stanley R.


Costain, A. P.
Hicks, Beach, Maj. W.
Macmillan, Rt. Hn. Harold (Bromley)


Coulson, Michael
Hiley, Joseph
Macmillan, Maurice (Halifax)


Courtney, Cdr. Anthony
Hill, Dr. Rt. Hon. Charles (Luton)
Macpherson, Niall (Dumfries)


Craddock, Sir Beresford
Hill, Mrs. Eveline (Wynthenshawe)
Maddan, Martin


Critchley, Julian
Hill, J. E. B. (S. Norfolk)
Maltland, Sir John







Manningham-Buller, Rt. Hn. Sir R.
Pym, Francis
Temple, John M.


Markham, Major Sir Frank
Quennell, Miss J. M.
Thatcher, Mrs. Margaret


Marples, Rt. Hon. Ernest
Ramsden, James
Thomas, Peter (Conway)


Marshall, Douglas
Rawlinson, Peter
Thompson, Kenneth (Walton)


Martin, Neil
Redmayne, Rt. Hon. Martin
Thompson, Richard (Croydon, S.)


Matthews, Cordon (Meriden)
Rees, Hugh
Thorneycroft, Rt. Hon. Peter


Maudling, Rt. Hon. Reginald
Rees-Davies, W. R.
Thornton-Kemsley, Sir Colin


Mawby, Ray
Renton, David
Tiley, Arthur (Bradford, W.)


Maxwell-Hyslop, R. J.
Ridley, Hon. Nicholas
Tilney, John (Wavertree)


Maydon, Lt.-Cmdr. S. L. C.
Ridsdale, Julian
Touche, Rt. Hon. Sir Gordon


Mills, Stratton
Rippon, Geoffrey
Turner, Colin


Montgomery, Fergus
Roberts, Sir Peter (Heeley)
Turton, Rt. Hon. R. H.


More, Jasper (Ludlow)
Robinson, Rt Hn Sir R. (B'pool, S.)
Tweedsmuir, Lady


Morgan, William
Robson Brown, Sir William
van Straubenzee, W. R.


Morrison, John
Rodgers, John (Sevenoaks)
Vane, W. M. F.


Mott-Radclyffe, Sir Charles
Roots, William
Vaughan-Morgan, Rt. Hon. Sir John


Nabarro, Gerald
Ropner, Col. Sir Leonard
Vickers, Miss Joan


Nicholson, Sir Godfrey
Royle, Anthony (Richmond, Surrey)
Vosper, Rt. Hon. Dennis


Nugent, Rt. Hon. Sir Richard
Russell, Ronald
Wakefield, Sir Wavell (St. M'lebone)


Oakshott, Sir Hendrie
St. Clair, M.
Walder, David


Orr, Capt. L. P. S.
Scott-Hopkins, James
Walker, Peter


Orr-Ewing, C. Ian
Seymour, Leslie
Walker-Smith, Rt. Hon. Sir Derek


Osborn, John (Hallam)
Sharples, Richard
Wall, Patrick


Osborne, Sir Cyril (Louth)
Shaw, M.
Ward, Dame Irene


Page, Graham (Crosby)
Shepherd, William
Watkinson, Rt. Hon. Harold


Page, John (Harrow, West)
Skeet, T. H. H.
Webster, David


Pannell, Norman (Kirkdale)
Smith, Dudley (Br'ntf'd &amp; Chiswick)
Wells, John (Maidstone)


Partridge, E.
Smithers, Peter
Whitelaw, William


Pearson, Frank (Clitheroe)
Smyth, Brig. Sir John (Norwood)
Williams, Dudley (Exeter)


Peel, John
Soames, Rt. Hon. Christopher
Williams, Paul (Sunderland, S.)


Percival, Ian
Spearman, Sir Alexander
Wills, Sir Gerald (Bridgwater)


Peyton, John
Speir, Rupert
Wilson, Geoffrey (Truro)


Pickthorn, Sir Kenneth
Stanley, Hon. Richard
Wise, A. R.


Pike, Miss Mervyn
Stevens, Geoffrey
Wolrige-Gordon, Patrick


Pilkington, Sir Richard
Steward, Harold (Stockport, S.)
Wood, Rt. Hon. Richard


Pitman, Sir James
Stodart, J. A.
Woodhouse, C. M.


Pitt, Miss Edith
Stoddart-Scott, Col. Sir Malcolm
Woodnutt, Mark


Pott, Percivall
Storey, Sir Samuel
Woollam, John


Powell, Rt. Hon. J. Enoch
Tapsell, Peter
Worsley, Marcus


Price, H. A. (Lewisham, W.)
Taylor, Sir Charles (Eastbourne)
Yates, William (The Wrekin)


Prior, J. M. L.
Taylor, Edwin (Bolton, E.)



Prior-Palmer, Brig. Sir Otho
Taylor, Frank (M'ch'st'r, Moss Side)
TELLERS FOR THE NOES:


Profumo, Rt. Hon. John
Taylor, W. J. (Bradford, N.)
Mr. Edward Wakefield and


Proudfoot, Wilfred
Teeling, Sir William
Mr. Chichester-Clark.

BUSINESS OF THE HOUSE

Proceedings on the Motion for an Instruction relating to Statutory Orders (Special Procedure) exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Iain Macleod.]

STATUTORY ORDERS (SPECIAL PROCEDURE)

10.1 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Geoffrey Rippon): I beg to move,
That an humble Address be presented to Her Majesty, praying that the provisions of the Statutory Orders (Special Procedure) Act, 1945, cease to apply to the following orders under the Public Health Act, 1875, that is to say—

(a) any order made under Section 303 of that Act
(b) any order made under paragraph (5) of Section 297 of that Act other than an order for the repeal, alteration or amendment of an Act confirming a provisional order made under Section 279 of that Act.
Perhaps for the convenience of the House, Mr. Speaker, this Motion could be discussed together with the following one:
That it be an Instruction to the Select Committee on Statutory Instruments that they consider all orders which are subject to Special Parliamentary Procedure.
since both relate to the same matters.

Mr. Speaker: Yes, if that be the general wish.

Mr. Rippon: The purpose of and the reasons for these Motions are set out in the White Paper, Command 1610, which has been presented to the House and which also includes a draft of the proposed Order in Council. This is, I think the House will agree, a matter of some constitutional importance.
The House will recall that in the discussion which took place on 23rd April, 1959, on the Leicester (Amendment of Local Enactments) Order, 1959, criticism was made that the special Parliamentary procedure was being applied to Orders of a legislative character that went beyond the scope of the original intention that the procedures should be applied to Orders of

an essentially executive character providing for the local application of a general policy already embodied in a Statute.
The criticism was made by a number of hon. Members on both sides of the House, including my hon. Friend the Member for Dover (Mr. Arbuthnot) and the hon. Member for Stalybridge and Hyde (Mr. Blackburn), who speak with authority on these matters. They were particularly concerned about the lack of detailed scrutiny of Orders which were akin to Private Bills and, indeed, of the total absence of scrutiny in the case of certain unopposed Orders.
As a result, my right hon. Friend the Chief Secretary to the Treasury, who was then the Minister of Housing and Local Government, undertook to hold an inquiry. We have now made a very thorough and, I think, very detailed examination of all the Acts and Orders to which this procedure can conceivably apply. I should like to acknowledge that in this we have had considerable assistance from Officers of the House. Hon. Members will appreciate that it has not been an easy task to inquire into all these matters, and it has taken some time, but the result was announced by my right hon. Friend the Chief Secretary to the Treasury in answer to a Parliamentary Question by my hon. Friend the Member for Dover on 1st August.
The position is that the Government now fully accept that the special Parliamentary procedure is not suitable for Orders such as the Leicester Order, which was made under Section 303 of the Public Health Act, 1875. Those Orders made under Section 303 are essentially legislative in character. Section 303 gives the Minister power by Order to amend or alter a host of local Acts which relate to the same subject matter as is found in the 1875 Act. The 1875 Act itself is now regularly read with a number of Public Health Acts from 1875 to 1932. Section 303 in addition has been specifically applied to local Acts which deal with the same subjects as the Public Health Act, 1936, the Food and Drugs Act, 1955, and certain parts of the Highways Act, 1959. In consequence a situation arose in which the Minister could by Order, in effect, amend


any part of a local authority general powers Act. In the case of the Leicester Order it amended Acts going back a hundred years.
It is a very useful method of tidying up local legislation and bringing it into line with modern practice. There is no evidence that it has ever been abused. On the other hand, it is not entirely appropriate for special Parliamentary procedure. Therefore, the Order in Council which is the subject of the present Motion will have the effect of applying once more to these Orders the Provisional Order procedure under which they came before Parliament up to the coming into operation of the Statutory Orders (Special Parliamentary Procedure) (Substitution) Order, 1949. As hon. Members know, this means they will be scheduled to a confirming Bill which will be treated for all practical purposes as a Private Bill.
Each one of the Order-making powers to which the special parliamentary procedure applies has been examined, and it has been concluded that the only comparable power under Section 303 of the 1875 Act is to be found in Section 297 (5) of the 1875 Act, which contains a complementary power to amend Provisional Order (Confirmation) Acts and special procedure Orders. For the most part these are Orders which have already been made under Section 303.
So, subject to one minor reservation to which I will refer in a moment, it does appear that Orders under Section 297 (5) should also revert to the Provisional Order procedure.
The reservation is this. Section 297 (5) is the only power under which Orders made under Section 279 of that Act for the setting up of joint boards can be amended. Section 279 has, in fact, been repealed, and replaced by Section 6 of the Public Health Act, 1936, but there are still in existence 16 joint sewerage boards set up under the old provision. Orders under Section 6 can be amended by Order under Section 9 of that Act. These Orders are essentially of an executive character. I am sure that the House will agree that it is sensible to provide the same sort of procedure for both the new and the old joint sewerage boards.
I hope the House will, therefore, feel that the proposals to revert back to the

Provisional Order procedure under Section 303 of the Act and, with the one reservation, Orders under Section 297 (5) of that Act, will meet all the criticisms which were raised in the discussion of the Leicester Order.
Coupled with this is the proposal that it should be an Instruction to the Select Committee on Statutory Instruments that it should examine all Orders subject to the special Parliamentary procedure in the same way as the Committee examines all other Statutory Instruments. This suggestion has been put to the Select Committee on Statutory Instruments, whose terms of reference, as hon. Members will know, require the Committee to consider whether there is anything in a Statutory Instrument to which it should draw the special attention of the House. The Select Committee has been good enough to say that it is prepared to undertake this task.
There still remain some matters which will remain to be looked at in the future. They are referred to in the statement made on 1st August—for example, whether there should be an extension of the period for making Petitions, or for putting down resolutions, and whether petitions of general objection could be more easily sent to a Joint Committee. But, apart from such modifications, which would need legislation, and, perhaps, can be considered on a future occasion, the Government have come to the broad conclusion that the special Parliamentary procedure is a suitable procedure for the Orders to which it will continue to apply, that is to say, Orders of comparatively limited scope whose purposes are the application of a general policy to local circumstances, the general policy having been formulated within a framework laid down by Statute. They are quite different in character from the Orders made under Section 303 of the Public Health Act, 1875, to which the main criticisms were directed in the debate which took place in 1959, criticisms, which, I trust, the House will now think have been largely met by the action which it is proposed to take.

10.21 p.m.

Sir Frank Soskice: I should have thought that the House would not have much difficulty in concluding that the Minister has made out his case for the two Motions. I think that it will be


generally recognised that the Special Procedure Act, 1945, has worked successfully. The old Provisional Order procedure, whereby Orders had to be scheduled to Bills, was generally accepted as being cumbersome and expensive. It has long been recognised that the Act of 1945, in substituting for the old procedure a far more simple and expeditious procedure, served a very useful purpose and has worked well over the years. But when it was introduced, it was recognised, I think on Second Reading, as being somewhat experimental in character. It made rather a big break with the existing procedure and the House accepted it on the understanding that its operation would have to be reviewed as the years went on.
I do not think that any serious complaint could be made of that Act, subject to the complaint that was voiced when the Leicester Local Act Amendment Order was before the House and when it was pointed out that, under the procedure which was laid down by the Special Procedure Act, it was perfectly possible for an Order with far-reaching consequences to be made by a Minister and to become law without any Parliamentary consideration being given to it.
That could happen under the terms of the Special Procedure Act if no Petition were presented. Even if a Petition for Amendment were presented, the scrutiny available to the House was limited. It was not possible for the House to range far outside the immediate topic covered by the Order. As a result of that Order, there was voiced the opinion that the Special Procedure Act had loopholes and that that sort of thing might happen if a petition against the Order were not presented.
No doubt that did not matter much if the Orders in question were simply Orders of the type to which it was originally intended that the Special Procedure Act should apply, namely, Orders which were primarily executive in effect and applying to a given situation a general provision contained within the framework of some larger enactment. When it was that sort of Order it did not matter so much, although, even so, executive acts should on many occasions be subject to some degree of Parliamentary scrutiny.
But it did matter when one had an Order such as the Leicester Order which

had the far-reaching effect of amending local enactments. The net result was that a Minister, by making an Order, and without subjecting it to scrutiny by Parliament, could by his ipse dixit amend a number of Acts of Parliament on the Statute Book. Clearly, that was a situation which the House could not contemplate with equanimity, and it is for that reason that the Government have brought forward the first of these two proposals, and I should have thought that the Minister had amply made out his case.
I had intended to ask the Parliamentary Secretary two questions, which I think he has answered in advance to my satisfaction. As he explained, the first proposal relates to Orders under Section 303, and with one qualification to Section 297, of the Public Health Act, 1875. The reasons why those two Sections are brought within the scope of the Government's proposal have been made very plain. What is the case, however, is that by an Order in 1949 the scope of the Special Procedure Act was considerably extended.
As originally passed, this Act applied only to Acts then on the Statute Book which provided for the making of Orders subject to Provisional Order procedure, and it substituted in that case the special Parliamentary procedure for the more cumbersome Provisional Order procedure. It did, however, apply to two further Acts which were contained in the Schedule to that Act, and when the Order of 1949 was made in this House the special Parliamentary procedure was extended to no less than eight other Acts.
Those other Acts, if one had considered the matter and had not known that the Government had given careful thought to the question, might be said also to confer power on Ministers to make Orders which were not purely executive in character, but the Minister satisfies me when he says that he and his Department have given careful thought to the question of whether the Order-making power in those Acts ought to be brought within the scope of the present procedure. I have not any particular ones to point to in respect of which I feel I would be able to differ, but I think that the Parliamentary Secretary recognises that the question


was worthy of consideration, and, indeed, he has answered it.
The second question I intended to ask relates to his second proposal, namely, that all Orders subject to the special Parliamentary procedure are now to be referred to the Select Committee on Statutory Instruments. I would have desired to know whether in making that proposal we should not be unduly overburdening the Select Committee. One knows that it already has a large volume of business to transact. There are many Statutory Instruments at which it has to look, and the examination of them must constitute a considerable burden. The question, therefore, is whether in adding this additional burden to the work it already has to undertake it might be asked to undertake an excessive amount of work.
From what the Minister said, it appears that he has been in communication with the Chairman of the Committee, and has received the answer that the Committee thinks that it can undertake this work. If it can, I think that this is a satisfactory situation. It means that all papers which are subject to special Parliamentary procedure will be scrutinised by the Select Committee, and the remainder will go back to the old Provisional Order procedure which, cumbersome as it is, at least produces the result that every Order will be carefully scrutinised by Parliament. My advice to the House would be to accept the Minister's proposals.

10.29 p.m.

Mr. John Arbuthnot: I should like to thank my right hon. Friend the Minister of Housing and Local Government and the Parliamentary Secretary for implementing the promise made by his predecessor. As my hon. Friend said, in April, 1959, a number of hon. Members on both sides of the House prayed against the Leicester (Amendment of Local Enactments) Order, and we sought certain alterations, which my hon. Friend has described, in the procedure of the House which would give Parliament greater control. We then received specific, but I must say limited, assurances from the Government. But, so far as I am concerned, I am satisfied that this draft Statutory Order fulfils those

assurances as far as they went. I am grateful to the Government for having done that.
The fact that we are discussing with the draft Statutory Order the Instruction to the Select Committee on Statutory Instruments that it considers
all Orders which are subject to Special Parliamentary Procedure",
widens the scope of the debate beyond merely those special procedure Orders made under Section 303 of the Public Health Act, 1875. It is to this wider aspect that I wish to address the few remarks that I propose to make.
On Second Reading of the Trunk Pipeline Bill, on 27th April last, I drew attention to the fact that
… except for the handful of Special Procedure Orders where objection is raised, parliamentary scrutiny is actually less than that given to Statutory Instruments subject to annulment. This is because, in the first place, Special Procedure Orders are not referred to the Statutory Instruments Committee of the Commons and, in the second place, the time for their annulment by a Resolution of either House is only fourteen days compared with forty days for a Statutory Instrument."—[OFFICIAL REPORT, 27th April. 1961; Vol. 639, c. 710.]
We are also discussing.
That it be an Instruction to the Select Committee on Statutory Instruments that they consider all Orders which are subject to Special Parliamentary Procedure.
The question that we must ask ourselves seems to me to be whether this is adequate. In my view, because of the rigid and cramped time limits within which special procedure Orders operate, it is not. The Statutory Instruments Committee normally meets only once a fortnight. Special procedure Orders, unless petitioned against, take only twenty-eight days from the time they are presented to the time that they come into force. This gives the House considerably less time to take action on an unfavourable Report of the Statutory Instruments Committee than in the case of a normal Order where the "praying" time is forty days.
At present, the time for "praying" against a special procedure Order might be almost non-existent in a case where, say, an Order is presented just after the Committee has met: the Committee meets fourteen days later when the Resolution period has expired; its unfavourable Report appears a few days


after that, and Standing Order 95A, which prohibits Prayers starting after 11.30 p.m., then operates during a period of late night sittings.
I further suggest that the Government's Motion does not go far enough in that it does nothing to allow Petitions against Orders to be presented out of time as is allowed in the case of Private or Provisional Order Bills. It is encouraging to see in the Explanatory Statement that the Government have in mind as a "minor modification" that they may consider bringing in legislation to allow Petitions out of time.
Some ridiculous cases have arisen as a result of the present rules. I refer to just three of them. A Petition against the Newquay and District Water Order, 1957, was received from California, but arrived at the wrong address. By the time the Petition had been readdressed, petitioning time had expired. Such a Petition would almost certainly have been received by a Committee on a Private Bill, but under the Statutory Orders (Special Procedure) Act it had to be disallowed.
The second case is that of the Maidstone (Extension) Order, 1954. After that Order had been laid it was desired to make a small boundary alteration which had been agreed. A Petition was presented against the Order but subsequently withdrawn as the expense of proceeding with it would have been out of proportion to the object. In the end the alteration was made by an amending Order later in the same Session.
The third and last case I wish to quote is the fact that the agents for the Cwmbran New Town Compulsory Purchase Order No. 9—The Garw—failed to serve a notice in time. As a result, a Petition was presented after the time had expired. Although this was admitted to be the fault of the applicant the Petition had to be certified as "not proper to be received." In this case the Order was withdrawn and a new Order was presented and certified as proper to be received.
I now turn to another matter in which, in my view, the Government's proposal falls short of what is desirable. It does nothing to make it easier for Petitions of General Objection to be referred to a Joint Committee, though I

am glad to see that this, too, is a "minor modification" which the Government have in mind.
The present position is that a petitioner must, all in the space of fourteen days, and I apologise for again quoting one of my own speeches:
consider the effect of the Order on himself and his property; take any necessary professional advice; draft and deposit his Petition in conformity with a complicated list of Rules and Standing Orders; contact two Members of Parliament or Peers, one to put down a Motion to annul the Order, the other to put down an Amendment to refer his Petition to a joint Committee, and finally, still within the fourteen days, obtain a majority of Peers or Members to stay late at night and vote for him on a complex local matter, outside their constituencies and almost certainly against the advice of the Government Whips."—[OFFICIAL REPORT, 27th April, 1961; Vol. 639, c. 712.]
I should now like to refer to the distinction drawn by the Explanatory Statement in paragraph 2 between the Leicester type of Order, made under Section 303 of the Public Health Act, 1875, and "the great majority of orders" whose purpose the Minister claims is "the application to local circumstances of a general policy formulated within a framework laid down by Parliament." This seems a wholly invalid distinction. All local Orders are merely the application of policy decided by Parliament to local circumstances. The policy involved in any Order is embodied in the Act under which the Order is made, and no petitioner seeks to challenge that. What he wishes to challenge is its application to his property or interests in a particular Order.
It seems that the reason why the Government, in 1945, did not accept the reference of all Petitions to a Joint Committee was that it was considered essential to prevent private interests from holding up Government action. In practice, however, the few cases that have gone before a Joint Committee have been preceded by a local inquiry, so that the delay and opportunity for obstruction caused by a hearing before a Joint Committee cannot be regarded as decisive.
As to the contrast between private interests and Government action, petitioners against special procedure Orders have proved to be for the most part local authorities. This conflict has not, I suggest, proved to be a very real one


in practice. As for the special procedure being cheaper, claimed as an advantage in the Explanatory Statement, this could easily be overcome by reducing the cost of Provisional Orders; for example, by waiving or drastically reducing the House fees and printing requirements involved. These, incidentally, were reforms recommended by the Joint Committee on Private Bill Procedure on which I had the honour to serve. The recommendation, however, has never been implemented.
This debate is a most useful one. I welcome the fact that these two Motions are being discussed together, because it enables those of us interested in parliamentary procedure to discuss how in this limited field we can best improve Parliamentary control. I have had cause to refer to some of those items referred to by the Government in the Explanatory Statement as "minor modifications", but I do not regard them as "minor". They are, I suggest, important safeguards which should be introduced without delay to protect the liberty of Her Majesty's subjects and to ensure proper scrutiny by Parliament of Statutory Orders. It seems to me that this will still be absent until further legislation is introduced.
Having said that, I wish warmly to welcome the step the Government are taking and the clear way in which my hon. Friend has introduced the Motion.

10.41 p.m.

Mr. F. Blackburn: The Parliamentary machine cannot be said to have been working at its most efficient, or very speedily, because it is now nearly three years since the promise was given by the then Minister of Housing and Local Government that this matter would be looked into and we have been waiting since then for action to be taken.
It is also six months since the former Minister of Housing and Local Government made his statement to the House and we have been waiting since then for this Order to be presented. Since I was concerned in the proceedings on the Leicester Bill which brought to light the problem, I wish to say a few words about the Order and the Instruction. A flaw was found in the Statutory Orders

(Special Procedure) Act, 1945, as extended by the Statutory Orders (Special Procedure) Substitution Order, 1949 in that there was found to be no adequate Parliamentary control. In fact, in some cases there was no Parliamentary control at all and it was only when there was a Petition against an Order that the Chairman of Ways and Means or the Lord Chamberlain in another place was brought into the picture.
On this question Erskine May is rather optimistic, for on page 1025, we find:
The origin of the provisional order method is to be found in the desire to lighten the expense of promoters, … of private bills which come before committees of both Houses. The aim of the Statutory Orders (Special Procedure) Act, 1945 was to make application for statutory powers still less expensive and to expedite procedure while still maintaining effective Parliamentary control.
As my right hon. and learned Friend the Member for Newport (Sir F. Soskice) said, the Act was extremely useful and achieved, at any rate, the first two objectives in making the application for statutory powers less expensive and expediting procedure, but, obviously, it did not provide that adequate necessary Parliamentary control. I am prepared to accept that there was effective Departmental control, but the responsibility for legislation rests upon Parliament.
Lord Morrison, then Mr. Herbert Morrison, when moving the Second Reading of the 1945 Act, said:
… the new procedure is experimental and … we shall have to watch how it goes."—[OFFICIAL REPORT, 18th Oct. 1945; Vol. 414, c. 1379.]
Whichever Government had been in power after 1945, this or a similar Act would have to be put on the Statute Book because a similar Act was introduced in, I think, March, 1945, by the National Government, but, because of the dissolution of Parliament, it was not possible for it to go through all its stages. The Act has an excellent purpose and no one wants to stop the good work that has been done by it.
Matters were brought to a head by the Leicester Amendment of Local Enactments Order, 1959. Since there was no Petition against it, there was no provision for any Parliamentary control at all. This Leicester Order was like a Bill. If I remember rightly—I am speaking from memory—it had at least


twenty Clauses amending many previous Leicester Acts, some of them going back, as the Parliamentary Secretary said, a hundred years. No hon. Member merely looking at the Order and reading it through could possibly know what it meant. We were assured that everything was in order, but to bring to the attention of Parliament this flaw, as I would call it, in the Act we decided to pray against the Order, not with the intention of defeating the Order but to call attention to this lack of Parliamentary control. In that debate, as has been said, an undertaking was given by the Chief Secretary to the Treasury, who was then Minister of Housing and Local Government, that they would look into the matter and bring suggestions before Parliament.
Shortly after that—that is, nearly three years ago—I put a suggestion to the Minister of Housing and Local Government which I thought would have dealt adequately with the problem. I should like briefly to refer to that suggestion, because it brings out one of the criticisms which I have of the Order. I submitted a scheme to the Minister of Housing and Local Government that the consideration of all Orders be submitted for consideration to the Committee on Unopposed Bills, which is experienced in dealing with the same sort of problems as arise on these Orders. I do not know whether that solution was too simple for Parliament—or was it that Orders against which there were Petitions would be considered by a Committee which dealt only with Bills which were unopposed?
That very same problem arises in the case of Special Procedure Orders, which are to be submitted to the Select Committee on Statutory Instruments. I shall have more to say on that matter. My suggestion would have been simple, it would have been easily understood, and all Orders would have been dealt with in the same way, and, consequently, there would have been no need to return to the Provisional Order procedure for orders made under Sections 297 and 303 of the Public Health Act, 1875, which are provided for in the Order which we are considering.
From time to time Questions were put down to the Minister of Housing and Local Government, but it was not until

1st August, 1961, that the Minister was able to make a statement, in answer to a question from the hon. Member for Dover (Mr. Arbuthnot). But as on that occasion the hon. Member for Dover did not rise to ask a supplementary question, and as, unfortunately, I was unable to catch Mr. Speaker's eye, no supplementary questions were asked. The statement which was made by the then Minister of Housing and Local Government dealt only with Orders under Section 303, but this Order goes a little further than that and has included
any order made under paragraph (5) of section 297 (repeal, alteration and amendment of provisional order Acts) other than an order for the repeal, alteration or amendment of an Act confirming a provisional order for the formation of a united district made under section 279 of the said Act of 1875.
That is the one extension which has been made to the suggestions which were put forward by the then Minister of Housing and Local Government.
I should like to quote from the last paragraph of that statement:
It has been suggested that each House might be helped if their attention could be drawn to any special point raised by an order subject to special Parliamentary procedure, and that this might be achieved by means which do not involve legislation. I am taking this up with the appropriate House authorities."—[OFFICIAL REPORT, 1st August, 1961; Vol. 645, c. 1122–3.]
I assume that the result of the Minister taking that up with the appropriate House authorities is that we have on the Order Paper today this Instrument and the other Orders which are subject to special Parliamentary procedure and which shall be submitted to the Select Committee on Statutory Instruments.
Perhaps it would shorten my speech if I dealt with the other points I wish to raise by way of putting a number of questions to the Parliamentary Secretary on the Order and the Instrument. The Minister said that the question of whether any other Orders should be subject to the same procedure as Sections 303 and 297 had been gone into carefully. But I wonder whether they have convinced themselves that it was the only way of dealing with the problem and securing Parliamentary control?
What happens to Petitions in the case of Orders which are subject to the Select Committee on Statutory Instruments? I am not quite sure whether the Minister


should not take back this Instrument for further consideration, because there are one or two points about the position which would arise that I do not think have been thought out. At present, in the case of Petitions—as I said earlier—the Chairman of Ways and Means and the Lord Chairman in another place come into the picture. But this merely says that they have to be submitted to the Select Committee on Statutory Instruments. Are the Petitions also to be submitted to that Committee, or are we to have two different procedures when there is a Petition? There is no mention of this.
I think that the hon. Gentleman the Member for Dover merely assumed that the fourteen days would be the amount of time allowed under the new procedure and he referred to the fact that ordinary Statutory Instruments have forty days. What is to happen? Have the special procedure Orders which are to be submitted to the Select Committee on Statutory Instruments to be restricted to the fourteen days of the special procedure Orders, or are they to have the forty days of the Statutory Instruments. These are matters which must be looked into.
I should also like to know whether this Order dispenses with the advertisement in the London Gazette. In a Statutory Instrument under the Schedule it refers to advertisements in a local paper. Not that I am particularly worried about this, but I do want to know more about it.
Concerning the Orders which are subject to special Parliamentary procedure and which are submitted to the Select Committee on Statutory Instruments, what happens to maps or plans which are referred to in Standing Order 239 (a)? Would they be submitted to the Select Committee on Statutory Instruments? If not, I do not see how the Select Committee can do its job. But there is no indication as to what is to happen.
I should also like to know whether consideration has been given to whether there is need for an alteration of the Standing Orders—and I refer to the Orders which are subject to special parliamentary procedure under Sections 237 to 248 (a). When is it intended that this Order should be put into operation? I

do not want to argue on this point, but I am not sure whether it is correctly laid. I understand that when a Statutory Instrument is laid it has to state the date, and on this one there is not a date. I should like to know when it is to come into operation.
I have criticisms both of the Order and of the Instructions. I shall not ask anyone to vote against them, though I think that further consideration will have to be given to the Instructions. As I say, certain problems are not solved merely by putting in that those Orders subject to the special procedure shall be sent to the Select Committee on Statutory Instruments. I am glad, however, that something has at last been done, and even though I do not very wholeheartedly support the Order or the Instructions I am glad that we have at least achieved some measure of Parliamentary control.

10.55 p.m.

Mr. Graham Page: The right hon. and learned Member for Newport (Sir F. Soskice) asked whether we might not be overburdening the Select Committee on Statutory Instruments by accepting this Motion. As a member of that Committee, and paying great tribute to the Speaker's Counsel and other Officers, whom we have to assist us there, I think that the Committee can cope with the work. It is a great advance in Parliamentary procedure to have the special procedure Orders investigated by such a Committee. At the same time, like the hon. Member for Stalybridge and Hyde (Mr. Blackburn), I think that certain other amendments should be made, apart from merely placing those Orders before the Select Committee on Statutory Instruments.
In particular, there is the question of the time between the consideration of the Order by that Select Committee and bringing it before the House—if the Committee reports on it to the House. Hon. Members will know the procedure. All that the Select Committee on Statutory Instruments can do is to make a report to the House if it is dissatisfied with an Order put before it. It may well be that the Order would come before the Select Committee towards the end of the period of fourteen days and if there were something wrong with it there might not be very much time to bring it to the notice of the House.
I regret that the Government were not able to bring forward legislation at the same time as this to extend the period for resolution. It is said in the draft:
It does not appear to the Government that there is an urgent need for legislation, but they consider that, if the occasion presents itself, further consideration might be given to three possible changes. …
One of the changes was to extend the resolution period, which I should have thought was urgent. I am not so concerned with the other two changes.
The hon. Member for Stalybridge and Hyde asked what would happen to the Petitions, and my bon. Friend the Member for Dover (Mr. Arbuthnot) asked about the time for Petitions. The vital thing is to bring the Order before the House if it is unsatisfactory in some respect, and there really is not time under the Special Order procedure, as compared with the time given to the Statutory Instruments Committee, to do so in every case. The difference between fourteen days and forty days is a serious matter.
The hon. Member for Stalybridge and Hyde said that the purpose of the Special procedure Order was to expedite procedure and to make it cheaper, and there must be some temptation to a Government to use the special procedure on occasion. In 1949, it was extended by the Statutory Orders (Special Procedure) (Substitution) Order to another eight or so statutes.
I put this question to my hon. Friend. Are this Order and its memorandum a preparation for an extension of the special procedure Order process to other subjects? It has been mooted lately that the special procedure Order would be appropriate for pipelines. The House will recall that we had a Private Bill dealing with trunk pipelines which many hon. Members on both sides thought was an unsatisfactory way of dealing with that very important subject. It has been suggested since that perhaps some General Clauses Act, plus special procedure Orders, might be the proper procedure. I myself think that that would be very unsatisfactory. In my view, the Provisional Order procedure would be far better and give far more opportunity for the House to consider a subject of that kind.
If there is any suggestion that the special procedure Order should be extended to such things as pipelines, where do we stop? The House has before it now a Private Bill dealing with the storage of gas under Winchester. I see my hon. Friend the Member for Winchester (Mr. Smithers) in his place. It may be found convenient to store gas underground in other places. This is much the same subject as pipelines, and again it has been mooted that the special procedure Order might be suitable there. This is a very serious matter.
If the only way in which matters of that kind are to come before the House is by a procedure giving fourteen days between the Order being laid, the Statutory Instruments Committee having looked at it and having reported to the House, and an hon. or right hon. Member noting the report and taking it up, then this will not, in my opinion, be the right way to deal with those important subjects.
I want my hon. Friend to give an assurance that this Order and memorandum are not in preparation for the extension of the special procedure Order process. If they are, then we want new legislation on the lines indicated in the memorandum giving the extended Resolution period.

11.3 p.m.

Mr. Rippon: If I may speak again, by leave of the House, I shall try to reply to some of the points which have been made.
My hon. Friend the Member for Dover (Mr. Arbuthnot) made criticisms which go to the heart of the whole procedure. It is our view that it does serve a valuable purpose, and the experimental period, if such it may be called, has proved that. I suggest that it was a procedure introduced as much for the benefit of applicants and petitioners as to expedite business in the post-war reconstruction period.
My hon. Friend spoke about holding up Government action. It is not really the purpose of the procedure to expedite Government action. My right hon. Friend the Member for Woodford (Sir W. Churchill) foreshadowed it, as the hon. Member for Stalybridge and Hyde (Mr. Blackburn) said, in a statement he made in 1944 arising out of the White Paper, "A National Water Policy." My


right hon. Friend then went so far as to say that it might replace the whole Provisional Order procedure.
Apart from being simpler and cheaper—which I think it is—this procedure has two substantial advantages. First, of course, these Orders will be brought forward at any time, not restricted to the timetable for the Provisional Order Confirmation Bill, which has to be introduced before 15th May. Secondly, hearings will be before a Joint Committee and not before separate Committees of each House. I think that that aspect of the procedure is one which makes it difficult to apply the suggestions which the hon. Member for Stalybridge and Hyde has in mind.
I suggest that the reasons leading to the adoption of this procedure for Orders which were of an, executive character, are as valid now as they were in 1945. It is the best procedure which can be adopted when the issue is the local application of a general policy. That can be best illustrated by the regrouping of water undertakings. Sixty-six of the 72 Orders which were made by the Minister of Housing and Local Government in the 1960–61 Session, and which could have become subject to this procedure, related to water supplies. Here, I would suggest that it is right that the question of national policy should be left to be defended by the Minister on the Floor of the House upon a Petition of general objection. I know that my hon. Friend the Member for Dover would like to see it made a little easier to put a Petition of general objection before the Joint Committee, and that, as the Government statement says, will be considered in due course.
What would certainly be wrong would be to send Petitions of general objection automatically to the Joint Committee. If the Minister regards an Order as being so critical to his policy that he is prepared to introduce a Bill, as he can under Section 6 of the 1945 Act, even if the Joint Committee upheld the Petition of general objection, it would obviously be quite wrong to put a Petitioner to the expense of going to a Committee.
My hon. Friends the Members for Dover, and Crosby (Mr. Page) were both concerned about the timetable being at

present too rigid. Not only is the period of fourteen days for introducing a petition and fourteen days for putting down a Resolution rather short, but there is no possibility of entertaining a petition out of time. However, I think that that should allow sufficient time for the Select Committee on Statutory Instruments to consider the matter because there is normally a gap between the two fourteen-day periods, so there would be perhaps about five weeks altogether in which this could be considered. At the same time, I frankly agree that the time-table is difficult, and we shall consider introducing legislation in due course.
It ought, of course, to be remembered that before the Order is made the whole case will be considered and the public will have an opportunity of making objections which may lead to a public inquiry. So, really, people who are likely to object to an Order are put on notice rather far in advance and can move fairly swiftly.
Under the special parliamentary procedure, many Orders do not come under any scrutiny unless there are objections. It is to meet the criticism about the lack of any scrutiny at all of an unopposed Order that tit is suggested that they should be scrutinised by the Select Committee on Statutory Instruments. I do not think that there will be any conflict between the two procedures, as the hon. Member for Stalybridge and Hyde suggested. The Select Committee will not have power to repeal or amend the Order. It will not be able to consider Petitions. What it will have is this important right to refer the matter to the House within the Resolution period, which will remain at fourteen days, and then, of course, there could be a debate.

Mr. Blackburn: Does it mean that the Select Committee will not even know whether there is a Petition or not?

Mr. Rippon: The Select Committee would not, I think, be affected in its consideration of whether the Order was a proper one by whether or not there was a Petition. If there were a Petition of amendment or general objection, then there is, of course, some scrutiny. When there is no Petition, it is felt that it is right that there should be some scrutiny by the Select Committee to make sure


that everything is in proper order. The Select Committee on Statutory Instruments would have an opportunity to study any maps and plans, as Iunderstand the position. I agree with the hon. Member for Stalybridge and Hyde that that is really essential.
The hon. Member for Stalybridge and Hyde asked about the position regarding advertisements in newspapers. That will be as set out in the draft Order—advertisements in two local newspapers. The hon. Member will see that the Schedule to the Order provides under Section 297 of the 1875 Act for two procedures—a procedure which will be applicable to Orders subject to the special Parliamentary procedure, and a procedure which is restored by Article IV (3) in the case of Provisional Orders.

Mr. Blackburn: Yes, but under the 1945 Act there had to be advertisements in the London Gazette and in the case of the Scottish Orders in the Edinburgh Gazette. I take it that that has now dropped out altogether, that it is merely left to one local paper?

Mr. Rippon: Yes, it will provide for advertisement in the local newspapers in these cases.
I think that most of the criticisms arise from a misconception of the nature of these special procedure Orders. The ones we are now considering are not akin in any way to Private Bills. I would suggest that it would be more correct to regard them as in the nature of negative Resolution Orders with this additional procedure for Petitions tacked on. The absence of any scrutiny, unless there is a Petition, can then be seen in its true perspective, because, after all, where we are concerned with the negative Resolution there is no procedure for scrutiny in a Committee.
I do not know that I have answered every point raised by the hon. Member for Stalybridge and Hyde. Any matters I have not covered I will write to him about, and give him a fuller and perhaps more accurate description of the procedure as it will now apply.

Mr. Blackburn: The date?

Mr. Rippon: Of course, the Statutory Instrument is not laid. That is not a requirement of the Act. It is a draft which is included in the White Paper

for the convenience of the House to enable this debate to take place.

Mr. Blackburn: When is it to be put into operation?

Mr. Rippon: I think that we can put it into operation speedily, following acceptance by the House of this Motion tonight.

Question put and agreed to.

Resolved,
That an humble Address be presented to Her Majesty, praying that the provisions of the Statutory Orders (Special Procedure) Act, 1945, cease to apply to the following orders under the Public Health Act, 1875, that is to say—

(a) any order made under Section 303 of that Act;
(b) any order made under paragraph (5) of Section 297 of that Act other than an order for the repeal, alteration or amendment of an Act confirming a provisional order made under Section 279 of that Act.

To be presented by Privy Councillors or Members of Her Majesty's Household.

Instruction to the Select Committee on Statutory Instruments to consider all orders which are subject to Special Parliamentary Procedure.—[Mr. Rippon.]

EMPLOYMENT, BLAYDON

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.12 p.m.

Mr. Robert Woof: I need hardly say there is nothing that gives me greater satisfaction than being given the opportunity to speak on the need for new industries in the constituency of Blaydon. In frequent conversations and communications which I have had with many earnest and conscientious workers, including clergymen, they have often asked me, "How is it that no new industries are built in the Blaydon area?" Accordingly, I have endeavoured to fix attention and lay particular stress on the provisions of the Local Employment Act, 1960. At the same time, while I accept there is always a psychological current which accompanies the course of economic causes, I must say that the present economic order of things in Blaydon requires


some appreciable consideration, by taking into account the exceptional degree of the decline in its main industry.
Formally, everything must have its cause, and the principal consideration as to why it is essential to take a serious view of the decline and deterioration of industrial employment opportunity in Blaydon chiefly arises from my previous questioning of the Parliamentary Secretary's right hon. Friend's predecessor. In seeking an answer, and a reason for Blaydon not to be scheduled as a development district, it was indicated that in the opinion of the Board of Trade the locality was not one in which a high rate of unemployment existed; neither was it expected, or even likely, to persist.
That reply may have been thought sufficient to help us over doubts about the future, but I am bound to submit that the perceptible impression given falls short by subsequent happenings, which conform in many ways to the changing aspect of the industrial structure. I am sure that the Parliamentary Secretary will not want me to mislead him and I have no wish to fall into the vicious circle of error, but I regard this as a matter of common observation and current experience of the displacement of labour due to industrial change.
When I have had the good fortune to speak in economic debates, I have endeavoured to concentrate attention on the restricted industrial development of Blaydon and the need for appropriate measures to be taken to offset the serious lack of industrial occupation. To recount in detail the public misfortune which has emanated from industrial decay would take mare time than I am allowed to devote to the subject now. However, I can say that there has been a bewildering metamorphosis consequent on circumstances entailed by adverse changes in industrial activity.
For instance, practically every aspect of the mining industry in Blaydon has been so much localised and specialised that in the daily experience of the rapid decline certain significant facts cause common anxiety. It is a plain fact that circumstances not only demonstrate the distinctive interests of the mining communities which are at stake, but show that much thought

must be given to the non-mining communities which are suffering from the process of the change. One needs to be at close grips to get a vivid conception of these non-mining communities which have grown up and which represent a general order of sequence of livelihood by which they are fastened to the industry's slippery slope.
I used to think that only when people had reached a full comprehension of social and economic development could they attain that higher communal life and fraternity which we all so earnestly desire. On the contrary, when one feels able to form conclusions through feelings of frustration, considerations of another kind present themselves, especially when the odds are in favour of deep impressions which are made in the changing interplay of local economic conditions.
In the trend of such circumstances, something must be said of the men's endeavours, Which should be credited to their willingness to work, but it seems to me that the most patient of men will become despondent if they have to suffer the disadvantages and irritations which arise from travelling many miles from home to take up periodical employment which leads to nowhere.
These circumstances enable me to submit considerations which are relevant to the question of industrial change. A firm hold is taken on the minds of men in areas where the decline in industrial activity is serious and where the prospect of alternative employment is poor. It does not require any vigorous effort of imagination to appreciate that lately there has been a deep impression on the instincts and sensibilities of people which has resulted from the disturbances to regular life which have swept over the whole area and from the fact that the mining industry is being hurled from its place of prominence, either through economic notions of competitive power, or through the natural exhaustion of reserves.
One inescapable result is that many workers are of an age that counts as a disqualification far other employment. It often happens that the well-being of these unfortunate victims of change is marked by the fact that they cannot easily find alternative employment for


which they are able and suited and that, ultimately, their standard of living falls for the rest of their lives.
The House will appreciate that in any purposeful analysis it will be accepted that the double tendency of any undesirable economic and social consequences of industrial change is so closely interlaced that it is difficult to discuss the two separately. However, I feel justified in pointing out that while there are numerous examples that I can quote, in the light of accumulating signs, one of the familiar facts that weigh heavily in the minds of people is the lingering economic fear that stalks across the portents of more redundancy to come, creating for the area nothing else than an unrivalled whirlpool of disillusionment. This is a pregnant fact, and what we see emerging into view is of profound public concern.
When we reflect for a moment, it will probably be accepted that manifestos of academic economists show how displacement of labour has been going on ever since the Industrial Revolution, for ever seeking improvement in productive efficiency, recognising at times labour-saving machines that would temporarily displace labour. Even in periods from depression to normal adjustment in economic activity there was always the prospect that redundant workers would, in the end, be absorbed by the expansion of other industries.
There is nothing intrinsically new in that—it is an old economic order that has always touched upon the question of human existence—but, whatever great foundations have been laid in the past, the crucial point I want to make resolves itself on the area to which I am referring, where it is tacitly accepted that factors of deep change have been introduced into people's lives by the remote prospects to work in alternative industries.
The substance of their social conceptions remains a common characteristic. They carry along with them their maxims and preserves to the extent that there are innumerable other considerations Which serve to conform to the same conclusion, but even in moderated sensibility, just as they cannot secure the status they want, they are naturally conscious of the dismal economic outlook.
We know perfectly well that in any economic calamity, when upheavals bring worrying problems, the undeserved loss of livelihood spreads into all age groups. It is this very thought that is certainly one of the greatest dreads and aversions. As a consequence of natural apprehensions, it will be found practical in some circumstances that migration to other districts tends to influence people's minds to better themselves. This involves decisions of fundamental concern, and such steps in many instances, I do not doubt for a moment, will be many times justified.
On this account it is perhaps correct to say that there are advantages and disadvantages in all states of life, but before any deductive interpretation can be made in this respect there remains the general induction of comparing populations in their geographical context. For a tolerably wide and mixed section of my constituents this represents concern of the highest importance. Anyone observing the drift of such things will see that facts on numerical reckoning could be brought equally to light by the defectiveness of expecting the structure and collectivism of whole populations of anywhere from 3,000, 4,000 and over 5,000 inhabitants to migrate in default of economic insecurity.
Unlike the nomadic tribes of the Arabian Desert, who follow a pastoral life, with the love of liberty to fold up their tents and disappear in the night, I make a special point and say that it is not a question of continuance of those deep laws of human nature involving people's habits and routine, but that, of necessity, something more is required whereby the means of industrial readjustment to meet the challenge of changing conditions can be brought into existence.
It necessarily follows, in trying to abridge this account of the vicissitudes and reaction in my constituency, that I cannot claim not to know the drill of the 1960 Local Employment Act. Neither do I boldly claim there to be mass unemployment, but I do attach great and serious importance to what is evidently regarded as the inevitable closing of more mines, including the backwash of previous redundancy, coupled with the proof of the relics of other industries that have seen better days and have come to an abrupt end.
Further to that, I do not think that it would he out of place to stress, in relation to those who have never had the good fortune to benefit in any other kind of productive industries, that at present many are engaged on what I would term the kind of work which is based on the temporary fleeting needs of labour. But because all this is a major problem in the lives of workers and their families, they are enduring what they cannot cure. In the circumstances, are we to assume that they are to be told to make the best of things as they are, or is the area to generate into spiritless stagnation?
If existing indications are not to be misinterpreted, in my lay judgment and as far as I can see, the symptoms rest on what I think, quite rightly, to be unquiet times that may be destined to grow more serious if no solution in one way or another is forthcoming.
Having attempted to identify events and effects, I might add that in so far as public service and interest arise, the only fresh opening to take place is the agreed scheme for the building of the new Scotswood Bridge. This I regard as the greatest event in Blaydon since Garibaldi visited the town during the last century. But as the general mind is no longer engaged in past aspects, and even although the future is yet to come, either at best or worst, I venture to affirm in the stress of economic force the difficulties to control the policy of industry, whether it is to decide what forms of production shall take place or the amount of capital to be raised.
I fully realise that it is impossible to look around us at the present time without perceiving how far-reaching is the process of change. Such large problems are registering in the duties of hon. Members in becoming more and more preoccupied with all the immense issues ultimately involved. Whatever else is disagreeable that puts us in the mood which disposes us to conceive what adversity means: first and foremost, as a national necessity, it is at a time when we are continually being told that economic improvement must, in the main, be effected through massive expansion and that such a high rate of growth depends on the British people in the exercise of personal responsibility.
With such a premium to be placed on vital needs, and for what I have taken the trouble to outline, I would plead with the Parliamentary Secretary to consider with his right hon. Friend how far the Board of Trade will display its responsibilities in the need for grafting improvements to succeed the old industrial structure. Meanwhile, I maintain that precisely because of the stimulus given by the North-East Development Association in serving its full purpose to elicit the need for industries, as anything gained by valuable co-ordination would be equally shared by public interest, by taking into account any industrial development that would play a more direct part in promoting and furthering the prospects of employment opportunities in Blaydon.

11.28 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Niall Macpherson): I have listened with attention and with sympathy to the eloquent and, at times, passionate plea for new industries advanced tonight by the hon. Member for Blaydon (Mr. Woof). I should like to thank him for his courtesy in having given me notice of the subjects he was proposing to raise and for the way in which he put his case.
I know very well the depressing effect and the feeling of frustration in a town and a district caused by the decline of a great industry. I know very well the strains and stresses of change that take place. But the first thing I looked at when the hon. Gentleman gave notice of his intention was the figure of the population in his area.
The hon. Member spoke of industrial decay, but the census of population figures for the three urban district council areas in his constituency showed an increase of 2 per cent. in the ten years from 1951 to 1961. He quite rightly said that there has not been a tremendous lot of development of industry in all parts of those urban districts in recent years, but one has to bear in mind that labour is far more mobile now than it used to be when the coal industry was expanding in North-West Durham, and Blaydon itself is less than five miles from Newcastle. Practically the whole of his constituency is within travel-to-work distance of the main centres of employment on Tyneside.
The main object of us all, I am sure, is to ensure that the men and women of his constituency and elsewhere find suitable employment not far from their homes, Many of the hon. Member's constituents have industrial employment within the constituency apart from the mines, for example, in Churchill Gear Machines, which was established in the area in 1956, J. W. Ellis & Co., which does constructional and general engineering, and other firms making building materials, bedding, plastics, and so on. Nevertheless, there is no doubt, I agree, that as things are the welfare of Blaydon and North-West Durham generally is linked with coal and steel. I can assure the hon. Member that we keep in the closest touch with the Ministry of Power and that the Minister keeps us fully informed of prospects in the coal mining industry.
The hon. Member referred to the exhaustion of coal reserves and pits which are to be closed, but I am told that the Coal Board hopes to offer alternative work to the great majority of men who are now employed at those pits and wish to continue to work in the mines. The Board expects that only a small number of those at present employed will be redundant. That does not, of course, mean that they will necessarily be employed immediately in their own area, but if we add those expected to be redundant to the numbers of those now unemployed we still could not regard the resulting total of unemployment as qualifying the area to be classified as a development district under the Local Employment Act.
The hon. Member said that closures will tend to mean that people will migrate away from the area. It may be that some will take jobs in pits elsewhere and move. It may also mean that some will prefer to seek jobs in other industries in other parts of the country. But there are jobs in prospect in the South Tyne West, Consett and Stanley Employment Exchange areas which number about 2,500 in all. This figure may be compared with the total average unemployment—at the moment, of course, it is higher—in these areas during 1961 which amounted to just over 2,500. There are also prospects in the Gateshead Employment Exchange area, part of which is

covered by the hon. Member's constituency. There is also Ransome and Marles, the ball-bearing firm in the Consett area.
In view of these prospects, the Government cannot conclude that the high and persistent unemployment which must exist before we can classify an area as a development district is likely in this area. The hon. Member told me of the construction in progress to modernise the Consett Ironworks and tonight he referred to jobs likely to come to an end. This work is likely to be completed by the end of this year.
The hon. Member said that many of his constituents, most of them ex-miners, are working on that construction, but there is a great deal of construction work to be done in the area, much of it not yet started. For example, there is the Tube Investment factory to be built at Washington, and there is also a good deal of building to be done at the Team Valley Trading Estate, which is just outside the hon. Gentleman's constituency and which has done so much to revive and sustain the area. I am sure that the hon. Gentleman agrees that this estate does not give to those who see it the impression of a stagnating area.
In this estate there are many progressive, expanding industries whose employment requirements are likely to increase. The Team Valley Trading Estate is one of the oldest established in the country, and it continues under the able management of the Industrial Estates Management Corporation for England to provide valuable and varied employment opportunities for the surrounding area. Among the 80 Board of Trade tenants on the estate are firms engaged in electronics production, the manufacture of pumps, rubber goods, mining equipment, thermoplastic tiles, cork products, electric lamps and the like.
These are new industries. This is not a picture of stagnation. I understand that only last week a firm of instrument makers, Baird and Tatlock, has taken over a factory on this estate. I should like to welcome the firm very warmly and to wish it all success. I hope that it will find its new surroundings congenial and will bring more work there. There is also the Newburn Estate, just beside the hon. Member's area.
I realise that the hon. Member would like us to list as development districts South Tyne West, and perhaps other employment exchange areas which fall partly or wholly in his constituency. But from what I have said he will recognise that we do not consider that the prospects known to us warrant such pessimism. Indeed, with the probable advent of further industry to the district, we have felt justified in putting Prudhoe, which is next door to him, on the stop list. I am sure that as de-stocking ends and demand rises in the steel industry, an efficient firm such as Consett Ironworks, newly modernised, will be able to take full advantage of the upturn.
Of course, the fact that we cannot see our way to put Blaydon and Stanley on the list of development districts does not mean that we should not encourage firms to go there if they could not go to development districts. We shall be very willing to give suitable firms industrial development certificates there. What it means is that we think that the prospects are more encouraging than seems to be thought in the area itself.
I assure the hon. Member that I appreciate the feeling which can come to an area and parts of an area when no industry is coming actually into it,

but with all these prospects round about surely it would be impossible for the Government to treat this as an area of high and persistent unemployment.
I can also assure the hon. Member that we are far from being unsympathetic towards the area's problems. Indeed, as he knows, Durham was one of the first areas which I visited when I took my present appointment. We shall certainly continue to watch the position most closely, and if a threat of high and persistent unemployment arises, the President of the Board of Trade will certainly consider making the area a development district. But on the evidence as we see it just now, there are good reasons to hope that it will not develop high and persistent unemployment. I hope that the hon. Member will take comfort from that. I know that the Consett Urban District Council has been making representations, too, in this direction, and I know that the regional controller, who has been here today—indeed, he is here now—will be looking very closely at this situation. I hope that the hon. Member will take comfort from this and that the whole of his area will do so too.

Question put and agreed to.

Adjourned accordingly at twenty minutes to Twelve o'clock.